$3 Million OCR Touchstone Settlement Warns Health Plans of Perils of HIPAA Violations

May 6, 2019

Health plans, their sponsoring employers and unions, insurers, fiduciaries, administrators, insurers and other service providers should learn from the $3 million lesson a Franklin, Tennessee-based diagnostic medical imaging services provider is learning about the heavy penalties a health plan, health care provider, health care clearinghouse  or business associate  (“Covered Entity”) risks if a post-data breach investigation by the U.S. Department of Health and Human Services (“HHS”) Office for Civil Rights (“OCR”)  shows  the Covered Entity breached the privacy, data security, business associate agreement and breach notificataion rules of the Health Insurance Portability and Accountability Act (HIPAA) Security and Breach Notification Rules before or after the breach.

Under a new OCR Resolution Agreement and Corrective Action Plan announced May 6, 2019, Touchstone Medical Imaging (“Touchstone”) must pay $3,000,000 to OCR and adopt a corrective action plan to settle OCR charges it violated HIPAA arising from an OCR investigation of Touchstone’s handling of a 2014 breach.  Around May 9, 2014, the Federal Bureau of Investigation (“FBI”) and OCR notified Touchstone that one of its FTP servers allowed uncontrolled access to PHI that allowed search engines to index the PHI of more than 300,000 of Touchstone’s patients, which remained visible on the Internet even after the server was taken offline.   While Touchstone initially claimed that no patient PHI was exposed,  in the course of OCR’s investigation, Touchstone subsequently admitted PHI of more than 300,000 patients was exposed including, names, birth dates, social security numbers, and addresses.  As a result of its delayed acknowledgement of the occurrence of the breach on May 9, 2014, Touchstone did not provide notice of the breach until October, 2014, months after OCR and FBI notified it of the breach.   See here.

OCR’s investigation found Touchstone breached HIPAA before and after the breach.  OCR’s investigation  found before the breach, Touchstone failed to conduct an accurate and thorough risk analysis of potential risks and vulnerabilities to the confidentiality, integrity, and availability of all of its electronic PHI (ePHI), and failed to have business associate agreements in place with its vendors, including their IT support vendor and a third-party data center provider as required by HIPAA.   OCR also found Touchstone did not thoroughly investigate the security incident until several months after notice of the breach from both the FBI and OCR.  Consequently, Touchstone’s notification to individuals affected by the breach also was untimely.

To resolve OCR charges arising from these events, Touchstone agreed to pay OCR $3,000,000.  In addition to the monetary settlement, Touchstone will undertake a robust corrective action plan that includes the adoption of business associate agreements, completion of an enterprise-wide risk analysis, and comprehensive policies and procedures to comply with the HIPAA Rules.

The Resolution Agreement illustrates the expensive price Covered Entities risk from failing to conduct risk assessments, obtain business associate agreements and fulfill other HIPAA requirements before a breach, then failing to promptly investigate, provide notification and redress a breach when discovered.  Covered Entities should learn from the painful lesson learned by Touchstone by reconfirming the adequacy of their current HIPAA  compliance and using care to timely and adequately investigate and provide notification if and when a breach occurs.

About the Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry, health and other benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors;  managed care organizations, insurers, self-insured health plans and other payers and their management; public and private, domestic and international hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, health care accreditation, peer review and quality committees and organizations; managed care organizations, insurers, third party administrative services organizations and other payer organizations;  billing, utilization management, management services organizations; group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; claims, billing and other health care and insurance technology and data service organizations; other health, employee benefit, insurance and financial services product and solutions consultants, developers and vendors; and other health, employee benefit, insurance, technology, government and other management clients.

A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompassess advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.

Beyond her public policy and regulatory affairs involvement, Ms. Stamer also has extensive experience helping these and other clients to design, implement, document, administer and defend workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government; accreditation and quality organizations; private litigation and other federal and state health care industry investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; training and discipline; enforcement, and a host of other related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, and change management; workforce and operations management, and other opportunities and challenges arising in the course of their operations.

Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; HIPAA administrative simplification, meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, antikickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA, HEDIS and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; 1557 and other Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns.

Ms. Stamer has extensive health care reimbursement and insurance experience advising and defending plan sponsors, administrators, insurance and managed care organizations, health care providers, payers, and others about Medicare, Medicaid, Medicare and Medicaid Advantage, Tri-Care, self-insured group, association, individual and employer and association group and other health benefit programs and coverages including but not limited to advising public and private payers about coverage and program design and documentation, advising and defending providers, payers and systems and billing services entities about systems and process design, audits, and other processes; provider credentialing, and contracting; providers and payer billing, reimbursement, claims audits, denials and appeals, coverage coordination, reporting, direct contracting, False Claims Act, Medicare & Medicaid, ERISA, state Prompt Pay, out-of-network and other nonpar insured, and other health care claims, prepayment, post-payment and other coverage, claims denials, appeals, billing and fraud investigations and actions and other reimbursement and payment related investigation, enforcement, litigation and actions. Scribe for the ABA JCEB annual agency meeting with HHS OCR, she also has worked extensively on health and health benefit coding, billing and claims, meaningful use and EMR, billing and reimbursement, quality measurement and reimbursement, HIPAA, FACTA, PCI, trade secret, physician and other medical, workforce, consumer financial and other data confidentiality and privacy, federal and state data security, data breach and mitigation, and other information privacy and data security concerns.

Author of leading works on a multitude of health care, health plan and other health industry matters, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting, former Vice President of the North Texas Health Care Compliance Professionals Association, past Chair of the ABA Health Law Section Managed Care & Insurance Section, past ABA JCEB Council Representative and CLE and Marketing Committee Chair, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer’s health industry clients include public health organizations; public and private hospitals, healthcare systems, clinics and other health care facilities; physicians, physician practices, medical staff, and other provider organizations; skilled nursing, long term care, assisted living, home health, ambulatory surgery, dialysis, telemedicine, DME, Pharma, clinics, and other health care providers; billing, management and other administrative services organizations; insured, self-insured, association and other health plans; PPOs, HMOs and other managed care organizations, insurance, claims administration, utilization management, and other health care payers; public and private peer review, quality assurance, accreditation and licensing; technology and other outsourcing; healthcare clearinghouse and other data; research; public and private social and community organizations; real estate, technology, clinical pathways, and other developers; investors, banks and financial institutions; audit, accounting, law firm; consulting; document management and recordkeeping, business associates, vendors, and service providers and other professional and other health industry organizations; academic medicine; trade associations; legislative and other law making bodies and others.

A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, privacy and data security, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns.

A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; a ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.

For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here.

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.

NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.

©2019 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press, Inc.™ For information about republication, please contact the author directly. All other rights reserved.


IRS Updates Plan Exemption & Exempt Organization Approval Procedures & Group Name

March 15, 2019

Tax exempt organizations and tax exempt employee benefit plans take note. The Internal Revenue Service (IRS) exempt organization determination procedures are changing.

Revenue Procedure 2019-5 updates the Exempt Organization determination letters procedures. Changes include:

Adding references to “new” Form 1024-A, Application for Recognition of Exemption Under Section 501(c)(4) of the Internal Revenue Code

Clarifying that the IRS won’t rule on a request under IRC Section 501(c)(6) for an organization whose purpose relates to a controlled substance that is illegal under federal law

Increasing user fees for certain miscellaneous determinations from $1,000 to $2,000

Changing the name of the Office of Associate Chief Counsel, Tax Exempt and Government Entities, to the Office of Associate Chief Counsel, Employee Benefits, Exempt Organizations and Employment Taxes.

These changes will impact processes for submitting approval applications and other exempt organization, VEBA, fraternal benefit association and qualified employee plan dealings with the IRS. Impacted organizations, their leaders and advisors will want to adjust accordingly.

About the Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of management focused employment, employee benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors;   domestic and international public and private health care, education and other community service and care organizations; managed care organizations; insurers, third-party administrative services organizations and other payer organizations;  and other private and government organizations and their management leaders.

Throughout her 30 plus year career, Ms. Stamer has continuously worked with these and other management clients to design, implement, document, administer and defend hiring, performance management, compensation, promotion, demotion, discipline, reduction in force and other workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government, accreditation and quality organizations, regulatory and contractual audits, private litigation and other federal and state reviews, investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; prepare and present training and discipline;  handle workforce and related change management associated with mergers, acquisitions, reductions in force, re-engineering, and other change management; and a host of other workforce related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, bankruptcy and other crisis and change management; management, and other opportunities and challenges arising in the course of workforce and other operations management to improve performance while managing workforce, compensation and benefits and other legal and operational liability and performance.

Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; HIPAA administrative simplification, meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, antikickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA, HEDIS and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; 1557 and other Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns.

A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.

Author of leading works on a multitude of labor and employment, compensation and benefits, internal controls and compliance, and risk management matters and a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.

For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here such as the following:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.

NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.

©2019 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press, Inc.™ For information about republication or the topic of this article, please contact the author directly. All other rights reserved.


Court Ruling Obamacare Unconstitutional Leaves Obamacare Future Uncertain As Annual Enrollment Period Ends

December 15, 2018

A ruling by a Federal District judge on Friday (December 14, 2018) ruled unconstitutional the Patient Protection and Affordable Care Act (ACA) touches off a new wave of uncertainty about the future of the massive healthcare reform law commonly known as Obamacare just as the enrollment period for 2019 health coverage ended. While Federal District Judge Reed O’Connor finds in his ruling released on Friday that amendments passed by Congress last December robbed the ACA of its original constitutionality, only time will tell if the ruling actually will end the ACA reforms or the effect of such ruling on the hotly debated ACA reforms and other statutory and regulatory reforms Congress and the Trump Administration subsequently prospectively or retrospectively. Consequently, health plans, their employer and other sponsors, insurers, administrators, and fiduciaries; health care providers, consumers and others will need to watch developments closely.

Justice O’Connor’s decision was released one day before the last day of the enrollment period for Americans to elect whether and what coverage, if any, to enroll in through the Obamacare exchanges for calendar 2019.

In Texas v. US, Texas Governor Greg Abbott and other Republican governors challenged the constitutionality of the ACA following passage of the Tax Cuts and Jobs Act of 2017 (TCJA). The plaintiffS argued the TCJA rendered the ACA unconstitutional because it repealed the individual mandate of the ACA upon which the Supreme Court previously found the ACA constitutional.

In the 2012 decision in Nat’l Fed’n of Indep. Businesses v. Sebelius (NFIB), 567 U.S. 519, 530–38 (2012) written by Chief Justice Roberts, the Supreme Court ruled that Congress could not rely upon the Commerce Clause for Constitutional authority to enact the ACA.  However, the Supreme Court nevertheless found the Individual Mandate provisions of the ACA preserved the constitutionality of the ACA as a constitutional exercise of Congress’ Taxing Power.

In Texas v. US, the plaintiff governors argue that the repeal of the Individual Mandate as part of Congress’ passage of the TCJA last December robbed the ACA of its constitutionality.  They say it is no longer fairly readable as an exercise of Congress’s Tax Power and continues to be unsustainable under the Interstate Commerce Clause. They further urge that  if they are correct, the balance of the ACA is untenable as inseverable from the Invalid Mandate. Judge O’Connor agreed with the plaintiff’s in his ruling on Friday.  Now it remains to be seen if his ruling  will face and withstand the appeal and if so, what effect it will have on Obamacare overall and other subsequent statutory and regulatory reforms.

While only time will tell whether the decision stands and its effect, the path to clarity promises to be filled with more drama and uncertainty.   Former US Attorney General Jeff Sessions previously had stated that the Justice Department under his leadership would not expend resources to defend the ACA.  It remains to be seen how the Justice Department will not respond in light of his recent resignation.  Even if the Justice Department does not step up to defend Obamacare, it is likely that states like California that have intervened in support of the ACA in the litigation will attempt to appeal the action.  Assuming that an appeal proceeds, a Court of Appeals would hear the appeal before an almost certain appeal by the losing side in that appeal to the United States Supreme Court, where President Trump’s new appointee would hear the action.  Along with the possibility that these Courts will uphold the trial court’s ruling, either of these appeals courts could overrule the trial court in whole or in part. Thus, subsequent appeals decisions could:

  • Reverse Judge O’Connor’s ruling entirely, leaving The ACA intact in its current form; or
  • Uphold part but not all of the decision, leaving some parts in place but not others.

pending further decisions, it remains unclear if subsidies, prohibitions against preexisting conditions, guaranteed issue, cost regulations, benefit and coverage mandates and other insurance reforms, health care billing and other reforms will survive.

Meanwhile, regardless of the outcome of the appeals, the decision and its fallout almost certainly will touch off more debate in Congress.  With health care reform already a hot topic, more Congressional battles were inevitable. However the decision adds a new and significant wrinkle to the politics of the health reform fight.

In January November’s election will cause the leadership of the House of Representatives is set to transfer from Republicans to Democrats while leaving control over the Senate in the hands of Republications.  With leadership of the two legislative bodies split, Democrats are unlikely to be able to use their new control of the House to enact legislation that would overrule outright an adverse decision by the courts. Consequently, Democrats will have an uphill battle if the court decision stands unless and until they can regain Senate control. Instead they are likely to be related to the role occupied by the House the past 4 years in which bills to enact the Democrat vision will pass the House only to die a quick death in the Republican controlled Senate or face veto by the Republican President.

On the other hand, Republicans also could not overcome a decision unfavorable to their agenda for the opposite reason: Despite control of the majority in the Senate and having a Republican President opposed to the ACA, Republicans can’t enact legislation without winning a majority of votes in the House.

On the other hand, either party can and almost certainly will use its veto power over the other party’s agenda. The fight likely will spill over into budget, immigration, workforce and other jet legislation that otherwise might and should enjoy bipartisan support in Congress.

As the litigation proceeds, concerned parties will want to keep a close eye of the Courts, the regulation and enforcement actions of the Trump Administration and the Congress.

Meanwhile, it is important to keep in mind that implementation of Judge O’Connor’s decision is stayed pending appeal.

About the Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of managed care and other health industry, health and other benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

Past Chair of the ABA Managed Care & Insurance Interest Group, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer is nationally recognized as a thoughtleader in health benefits and health care matters domestically and internationally.  She has been continuously involved the design, regulation, administration and defense of managed care and other health and employee benefit, health care, human resources and other staffing and workforce arrangements, contracts, systems, and processes.  As a continuous component of this work, Ms. Stamer has worked closely with these and other clients on the design, development, administration, defense, and breach and data recovery of health care, workforce, insurance and financial services, trade secret and other information technology, data and related process and systems development, policy and operations throughout her career.

Scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues.

Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors;  managed care organizations, insurers, self-insured health plans and other payers and their management; public and private, domestic and international hospitals, health care systems, clinics, skilled nursing, long-term care, rehabilitation and other health care providers and facilities; medical staff, health care accreditation, peer review and quality committees and organizations; managed care organizations, insurers, third-party administrative services organizations and other payer organizations; billing, utilization management, management services organizations; group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; claims, billing and other health care and insurance technology and data service organizations; other health, employee benefit, insurance and financial services product and solutions consultants, developers and vendors; and other health, employee benefit, insurance, technology, government and other management clients.

A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompasses advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.

Beyond her public policy and regulatory affairs involvement, Ms. Stamer also has extensive experience helping these and other clients to design, implement, document, administer and defend workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government; accreditation and quality organizations; private litigation and other federal and state health care industry investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; training and discipline; enforcement, and a host of other related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, and change management; workforce and operations management, and other opportunities and challenges arising in the course of their operations.

Ms. Stamer also has extensive health care reimbursement and insurance experience advising and defending plan sponsors, administrators, insurance and managed care organizations, health care providers, payers, and others about Medicare, Medicaid, Medicare and Medicaid Advantage, Tri-Care, self-insured group, association, individual and employer and association group and other health benefit programs and coverages including but not limited to advising public and private payers about coverage and program design and documentation, advising and defending providers, payers and systems and billing services entities about systems and process design, audits, and other processes; provider credentialing, and contracting; providers and payer billing, reimbursement, claims audits, denials and appeals, coverage coordination, reporting, direct contracting, False Claims Act, Medicare & Medicaid, ERISA, state Prompt Pay, out-of-network and other nonpar insured, and other health care claims, prepayment, post-payment and other coverage, claims denials, appeals, billing and fraud investigations and actions and other reimbursement and payment related investigation, enforcement, litigation and actions. Scribe for the ABA JCEB annual agency meeting with HHS OCR, she also has worked extensively on health and health benefit coding, billing and claims, meaningful use and EMR, billing and reimbursement, quality measurement and reimbursement, HIPAA, FACTA, PCI, trade secret, physician and other medical, workforce, consumer financial and other data confidentiality and privacy, federal and state data security, data breach and mitigation, and other information privacy and data security concerns.

Author of leading works on a multitude of health care, health plan and other health industry matters, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting, former Vice President of the North Texas Health Care Compliance Professionals Association, past Chair of the ABA Health Law Section Managed Care & Insurance Section, past ABA JCEB Council Representative and CLE and Marketing Committee Chair, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer’s health industry clients include public health organizations; public and private hospitals, healthcare systems, clinics and other health care facilities; physicians, physician practices, medical staff, and other provider organizations; skilled nursing, long-term care, assisted living, home health, ambulatory surgery, dialysis, telemedicine, DME, Pharma, clinics, and other health care providers; billing, management and other administrative services organizations; insured, self-insured, association and other health plans; PPOs, HMOs and other managed care organizations, insurance, claims administration, utilization management, and other health care payers; public and private peer review, quality assurance, accreditation and licensing; technology and other outsourcing; healthcare clearinghouse and other data; research; public and private social and community organizations; real estate, technology, clinical pathways, and other developers; investors, banks and financial institutions; audit, accounting, law firm; consulting; document management and recordkeeping, business associates, vendors, and service providers and other professional and other health industry organizations; academic medicine; trade associations; legislative and other law making bodies and others.

A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about contracting, credentialing and quality assurance,  compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, privacy and data security, and other risk management and operational matters. Author of works on Payer and Provider Contracting and many other managed care concerns, Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns.

A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.

For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here such as:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.

NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.

©2018 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press, Inc.™ For information about republication, please contact the author directly. All other rights reserved.


Flurry of Reform Activity Sign Employers, Health Plans Should Prepare To Respond To Last Minute Health Reforms This Fall

July 14, 2018

A flurry of activity in the House Ways & Means Committee and other Congressional committees over the past few weeks signals the advisability of keeping a close eye on health care and health benefit reform proposals this Summer in anticipation of both the Fall health benefit enrollment and renewal season and the mid-term November Congressional elections.

Coupled with the Trump Administration’s recent rollout of its long promised association health plan, short-term coverage and other regulatory reforms and promises of more changes to come, the ongoing attention paid by the Administration and Congress  to health insurance and health care reform raises a strong possibility that employer, association, and other health plan sponsors, fiduciaries and their vendors that they and their plan members should be on watch for late-breaking developments that may require or warrant last minute changes to health benefit plan designs, communications, contracts or other key decisions.

With President Trump continuing to push for a wide range of health care reforms and health care and health benefit issues recognized as key voter concerns for the upcoming mid-term elections in November,  the continued emphasis of the Republican-led Congress and federal regulators talking about their health care reform legislative agenda is not surprising. What may be more surprising to many is the intensity of the ongoing efforts in Congress to try to pass reform over the summer when many members of the House and Senate face tightly contested races in November.

Certainly continued Congressional commitment to pursue reform is evident from the House Ways & Means Committee’s health care heavy agenda of hearings and votes that this week alone resulted in its voting in favor of 11 health care reform bills promising new flexibility for employers about how to design their health plans and American families more health care choices and choice about how to pay for it and what coverage to buy popular with many providers, patients and employer and other health plan sponsors. While it remains to be seen if the House and Senate can agree on any or all of these proposal, the bi-partisan sponsorship of many of these proposals and the intensity of the focus of the Committee and others in Congress reflects a strong interest in health care reform by both parties leading up to November that could impact health benefit and other health care choices for providers, employers and American families in the Fall annual enrollment season.

The legislation passed by the Ways & Means Committee this weeks include bills that would:

  • Provide relief for employers relief from the Obamacare’s employer mandate and delay for an additional year the effective date of the widely disliked “Cadillac Tax;”
  • Overrule the “Use it Or Lose It” requirement in current Internal Revenue Regulations for healthcare flexible spending arrangement plans (HFSAs) that currently forces employers sponsoring HFSAs to draft their plans to require employees to forfeit unused salary reduction contributions in their HFSA accounts at the end of the year;
  • Offer individuals and families eligible for Obamacare created health premium subsidies more choice about where to obtain that coverage using their subsidies; and
  • Expand expand the availability and usability of HSAs in a multitude of ways.

Furthermore, a review of the Committee’s schedule makes clear that it isn’t finished with health care reform.  After holding hearings on health savings account reforms and passing a flurry of health care reform bills intended to give employers relief from two key Obamacare mandates, to allow Obamacare subsidy-eligible Americans the choice to use the subsidies to purchase health care coverage not offered by the Obamacare exchanges,  and a host of bills that would expand availability and usability of health savings account (HSA) and health care flexible spending account (HFSA) programs this week, the House Ways and Means Committee will turn its attention to health care fraud oversight and reform next week by holding hearings Tuesday on those health concerns.  Health care providers, employer and other health plan sponsors, individual Americans and their families, and others interested in health benefit and health care reform will want to keep a close eye on these and other developments as Congress continues to debate health care reform in the runup to the upcoming 2018 health benefit plan renewal and annual enrollment season and November’s mid-term elections.

Committee Approved 11 Health Care Reform Bills This Week

As a part of its health reform efforts this week, the Committee voted to advance 11 health care reform bills offering new flexibility for employers about how to design their health plans and American families more health care choices and choice about how to pay for it and what coverage to buy popular with many providers, patients and employer and other health plan sponsors.

Among the approved legislation is a bill that would provide key relief for employers from certain key Obamacare mandates that have been widely unpopular with employers.  H.R. 4616, the “Employer Relief Act of 2018,” sponsored by Rep. Devin Nunes (R-CA) and Rep. Mike Kelly (R-PA), which would give employers sponsoring health plans for their employees retroactive relief from Obamacare’s onerous employer mandate and delay for an additional year the effective date of another Obamacare requirement that when effective, will forces employers to pay the 40 percent tax on amounts paid for employer sponsored health care coverage  that exceeds cost limits specified in the Obamacare legislation commonly known as the “Cadillac Tax.”  Relief from the Cadillac Tax is widely perceived as benefiting bother employers and their employees, as its provisions penalize employers for spending more for employee health coverage than limits specified in the Obamacare law.  These provisions also are particularly viewed by many as unfair because rising health plan costs since Obamacare’s passage make it likely that many employers will incur the tax penalty simply by sponsoring relatively basic health plans meeting the Obamacare mandates.

In addition to H.R. 4616,  the Committee also voted to approve H.R. 6313, the “Responsible Additions and Increases to Sustain Employee Health Benefits Act of 2018,” sponsored by Rep. Steve Stivers (R-OH), which would overrule the “Use it Or Lose It” requirement in current Internal Revenue Regulations for HFSAs.  Currently, this rule forces employers sponsoring HFSAs to draft their plans to require employees to forfeit unused salary reduction contributions in their HFSA accounts at the end of the year.  The bill would allow employers to eliminate this forfeiture requirement so that employees could carry over any remaining unused balances in their HFSAs at the end of the year to use in a later  year.

The Committee also voted to advance legislation to offer individuals and families eligible for Obamacare created health premium subsidies more choice about where to obtain that coverage.  H.R. 6311, the “Increasing Access to Lower Premium Plans Act of 2018,” sponsored by Chairman Peter Roskam (R-IL) and Rep. Michael C. Burgess, M.D. (R-TX), would provide individuals receiving subsidies to help purchase health care coverage through the Obamacare-created health insurance exchange the option to use their premium tax credit to purchase health care coverage from qualified plans offered outside of the exchanges.  Currently, subsidies may only be used to purchase coverage from health plans offered through the exchange, which often are much more costly and offer substantially fewer coverage options and less provider choice.  In addition, the bill would expand access to the lowest-premium plans available for all individuals purchasing coverage in the individual market and allows the premium tax credit to be used to offset the cost of such plans.

Along with these reforms, the Committee also voted to pass a host of bills that would expand the availability and usability of HSAs including:

  • H.R. 6301, the “Promoting High-Value Health Care Through Flexibility for High Deductible Health Plans Act of 2018,” co-sponsored by Health Subcommittee Chairman Peter Roskam (R-IL) and Rep. Mike Thompson (D-CA), which seeks to expand access and enhance  the utility of Health Savings Accounts (HSAs) by offering patients greater flexibility in designing their plan design while still being able to maintain their eligibility for HSA contributions.
  • H.R. 6305, the “Bipartisan HSA Improvement Act of 2018,” sponsored by Rep. Mike Kelly (R-PA) and Rep. Earl Blumenauer (D-OR), which also would expand HSA access and  utility by allowing spouses to also make contributions to HSAs is their spouse has an FSA and lets employers offer certain services to employees through on-site or retail clinics.
  • H.R. 6317, the “Primary Care Enhancement Act of 2018,” co-sponsored by Rep. Erik Paulsen (R-MN) and Rep. Earl Blumenauer (D-OR), which seeks to protect HSA-eligible individuals who participate in a direct primary care (DPC) arrangement from losing their HSA-eligibility merely because of their participation in a DPC. In addition, it allows DPC provider fees to be covered with HSAs.
  • H.R. 6312, the “Personal Health Investment Today (PHIT) Act,” sponsored by Rep. Jason Smith (R-MO) and Rep. Ron Kind (D-WI), which seeks to fight obesity and promote wellness by allowing taxpayers to use tax-preferred accounts to pay costs of gym membership or exercise classes, children’s school sports programs and certain other wellness programs and activities.
  • H.R. 6309, the “Allowing Working Seniors to Keep Their Health Savings Accounts Act of 2018,” sponsored by Rep. Erik Paulsen (R-MN), which would expand HSA eligibility to include Medicare eligible seniors who are still in the workforce.
  • H.R.6199, the “Restoring Access to Medication Act of 2018,” sponsored by Rep. Lynn Jenkins (R-KS) and Rep. Grace Meng (D-NY), which would reverse Obamacare’s prohibition on using tax-favored health accounts to purchase over-the-counter medical products and would add feminine products to the list of qualified medical expenses for the purposes of these tax-favored health accounts.
  • H.R. 6306, the “Improve the Rules with Respect to Health Savings Accounts,” sponsored by Rep. Erik Paulsen (R-MN), which would increase the contribution limits for HSAs and further enhances flexibility in plans by allowing both spouses to contribute to make catch-up contributions to the same account and creating a new grace period for medical expenses incurred before the HSA was established.
  • H.R. 6314, the “Health Savings Act of 2018,” sponsored by Rep. Burgess (R-TX) and Rep. Roskam (R-IL), would expand eligibility and access to HSAs by allowing plans categorized as “catastrophic” and “bronze” in the exchanges to qualify for HSA contributions.

Committee Considers Health Care Fraud Next Week 

The Committee next week will turn its attention to health care fraud by holding two hearings on Tuesday.

Both hearings are scheduled to take place in Room 1100 Longworth and their proceedings will be live streamed on YouTube.

The Committee’s health care reform focus this week and next are reflective of the continued emphasis of members of Congress in both parties on health care reform legislation as they prepare for the impending mid-term elections in November.  As a part of these efforts,  the House and Senate already over the past several months have held a wide range of hearings in various committees and key votes on a multitude of reform proposals.  Numerous other hearings and votes are planned over the next several months as Congressional leaders from both parties work to advance their health care agendas in anticipation of the upcoming elections.

Key health care and health benefit reform  proposals that the Republican Majority has designated for priority consideration include:

  • Prescription drug costs by checking perceived negative effects of health industry and health plan consolidations involving large health insurers, pharmacy benefit  management companies (PBMs), pharmacy companies and other health industry and health insurance organizations on health care costs and patient, plan sponsor and plan sponsor choice and health care quality;
  • Oversight and reform of existing STARK, anti-kickback and other federal health care rules and exemptions relied upon by PBMs and other health industry organizations;
  • Efforts to understand and address health care treatment, health care and coverage costs and related social concerns associated with mental health and opioid and other substance abuse conditions and their treatment;
  • Efforts promote health  benefit and health care choice, affordability and coverage;  improve patient and employer choice; promote broader health care access and quality; reduce counterproductive regulation; and other health insurance and care improvements through expanded availability of health savings accounts, direct primary care and other consumer directed health care options, association health plan and other program options, streamlining quality reporting and regulation, billing and coding, physician and other health care provider electronic billing and recordkeeping,  and other provider,  payer, employer, individual and other health insurance mandates and other federal health care and health plan rules; and
  • More.

Evolving Legislative & Regulatory Warrant Vigilance & Change Readiness

While the recurrent stalling of past reform efforts over the past few years calls into question whether any or all of these proposals can make it through the highly politicized and divided Congress, bi-partisian sponsorship of most of the bills reported out this week at least raises the possibility that some of these proposals enjoy sufficient bi-partisan support to potentially pass before the elections. With both parties viewing health care reform as a key issue in the upcoming elections, voter feedback on these proposals could play a big role in determining the prospects for passage this Summer.

Along with the ongoing Congressional reform efforts, the Trump Administration also continues to move forward on a series of regulatory reforms that also could impact health care and health benefit decisions and responsibilities later this year.  Beyond the Administration’s implementation of its long promised and recently finalized and released association health plan, short term coverage and other health benefit rules, the Administration’s  continued consideration of changes to essential health benefits and other Obamacare regulations, ongoing mental health, substance abuse, and prescription drug reform projects, and other proposed regulatory and enforcement changes are likely to require health plans, their sponsors, insurers, administrators, members and even providers to adapt to changes in federal health plan rules between now and year end.

Amid this shifting legal landscape, employer and other health plan sponsors, their insurers, vendors, providers and participants will want to remain vigilant and work to preserve the flexibility to respond to new rules or guidance likely to rollout over the next several months.

Staying on top of proposed reforms as the Summer progresses is important:

  • To provide timely input to Congress on proposed reforms of particular benefit or concern;
  • To help plan for and deal with rules changes that could impact their options and choices during the upcoming health plan renewal and enrollment season this Fall and going forward; and
  • To be prepared to make informed choices when voting in the upcoming mid-term Congressional elections in November.

Keeping informed about potential changes is only part of the challenge, however.  Employer and other health plan sponsors, fiduciaries and service providers also generally should seek to negotiate vendor contracts that allow them the greatest possible flexibility to respond to changing rules, opportunities and requirements with minimum penalties and disruption when designing, negotiating and implementing vendor contracts, plan designs and plan enrollment and other processes and communications.

About the Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 30+ years of health industry, health and other benefit and insurance, workforce and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer’s clients include employers and other workforce management organizations; employer, union, association, government and other insured and self-insured health and other employee benefit plan sponsors, benefit plans, fiduciaries, administrators, and other plan vendors;  managed care organizations, insurers, self-insured health plans and other payers and their management; public and private, domestic and international hospitals, health care systems, clinics, skilled nursing, long term care, rehabilitation and other health care providers and facilities; medical staff, health care accreditation, peer review and quality committees and organizations; managed care organizations, insurers, third party administrative services organizations and other payer organizations;  billing, utilization management, management services organizations; group purchasing organizations; pharmaceutical, pharmacy, and prescription benefit management and organizations; claims, billing and other health care and insurance technology and data service organizations; other health, employee benefit, insurance and financial services product and solutions consultants, developers and vendors; and other health, employee benefit, insurance, technology, government and other management clients.

A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in pensions, healthcare, workforce, immigration, tax, education and other areas, Ms. Stamer has been extensively involved in U.S. federal, state and local health care and other legislative and regulatory reform impacting these concerns throughout her career. Her public policy and regulatory affairs experience encompassess advising and representing domestic and multinational private sector health, insurance, employee benefit, employer, staffing and other outsourced service providers, and other clients in dealings with Congress, state legislatures, and federal, state and local regulators and government entities, as well as providing advice and input to U.S. and foreign government leaders on these and other policy concerns.

Beyond her public policy and regulatory affairs involvement, Ms. Stamer also has extensive experience helping these and other clients to design, implement, document, administer and defend workforce, employee benefit, insurance and risk management, health and safety, and other programs, products and solutions, and practices; establish and administer compliance and risk management policies; comply with requirements, investigate and respond to government; accreditation and quality organizations; private litigation and other federal and state health care industry investigations and enforcement actions; evaluate and influence legislative and regulatory reforms and other regulatory and public policy advocacy; training and discipline; enforcement, and a host of other related concerns. Ms. Stamer’s experience in these matters includes supporting these organizations and their leaders on both a real-time, “on demand” basis with crisis preparedness, intervention and response as well as consulting and representing clients on ongoing compliance and risk management; plan and program design; vendor and employee credentialing, selection, contracting, performance management and other dealings; strategic planning; policy, program, product and services development and innovation; mergers, acquisitions, and change management; workforce and operations management, and other opportunities and challenges arising in the course of their operations.

Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, heavily involved in health benefit, health care, health, financial and other information technology, data and related process and systems development, policy and operations throughout her career, and scribe of the ABA JCEB annual Office of Civil Rights agency meeting, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues. She regularly helps employer and other health benefit plan sponsors and vendors, health industry, insurers, health IT, life sciences and other health and insurance industry clients design, document and enforce plans, practices, policies, systems and solutions; manage regulatory, contractual and other legal and operational compliance; vendors and suppliers; deal with Medicare, Medicaid, CHIP, Medicare/Medicaid Advantage, ERISA, state insurance law and other private payer rules and requirements; contracting; licensing; terms of participation; medical billing, reimbursement, claims administration and coordination, and other provider-payer relations; reporting and disclosure, government investigations and enforcement, privacy and data security; and other compliance and enforcement; Form 990 and other nonprofit and tax-exemption; fundraising, investors, joint venture, and other business partners; quality and other performance measurement, management, discipline and reporting; physician and other workforce recruiting, performance management, peer review and other investigations and discipline, wage and hour, payroll, gain-sharing and other pay-for performance and other compensation, training, outsourcing and other human resources and workforce matters; board, medical staff and other governance; strategic planning, process and quality improvement; HIPAA administrative simplification, meaningful use, EMR, HIPAA and other technology, data security and breach and other health IT and data; STARK, antikickback, insurance, and other fraud prevention, investigation, defense and enforcement; audits, investigations, and enforcement actions; trade secrets and other intellectual property; crisis preparedness and response; internal, government and third-party licensure, credentialing, accreditation, HCQIA, HEDIS and other peer review and quality reporting, audits, investigations, enforcement and defense; patient relations and care; internal controls and regulatory compliance; payer-provider, provider-provider, vendor, patient, governmental and community relations; facilities, practice, products and other sales, mergers, acquisitions and other business and commercial transactions; government procurement and contracting; grants; tax-exemption and not-for-profit; 1557 and other Civil Rights; privacy and data security; training; risk and change management; regulatory affairs and public policy; process, product and service improvement, development and innovation, and other legal and operational compliance and risk management, government and regulatory affairs and operations concerns.

Ms. Stamer has extensive health care reimbursement and insurance experience advising and defending plan sponsors, administrators, insurance and managed care organizations, health care providers, payers, and others about Medicare, Medicaid, Medicare and Medicaid Advantage, Tri-Care, self-insured group, association, individual and employer and association group and other health benefit programs and coverages including but not limited to advising public and private payers about coverage and program design and documentation, advising and defending providers, payers and systems and billing services entities about systems and process design, audits, and other processes; provider credentialing, and contracting; providers and payer billing, reimbursement, claims audits, denials and appeals, coverage coordination, reporting, direct contracting, False Claims Act, Medicare & Medicaid, ERISA, state Prompt Pay, out-of-network and other nonpar insured, and other health care claims, prepayment, post-payment and other coverage, claims denials, appeals, billing and fraud investigations and actions and other reimbursement and payment related investigation, enforcement, litigation and actions. Scribe for the ABA JCEB annual agency meeting with HHS OCR, she also has worked extensively on health and health benefit coding, billing and claims, meaningful use and EMR, billing and reimbursement, quality measurement and reimbursement, HIPAA, FACTA, PCI, trade secret, physician and other medical, workforce, consumer financial and other data confidentiality and privacy, federal and state data security, data breach and mitigation, and other information privacy and data security concerns.

Author of leading works on a multitude of health care, health plan and other health industry matters, the American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting, former Vice President of the North Texas Health Care Compliance Professionals Association, past Chair of the ABA Health Law Section Managed Care & Insurance Section, past ABA JCEB Council Representative and CLE and Marketing Committee Chair, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer’s health industry clients include public health organizations; public and private hospitals, healthcare systems, clinics and other health care facilities; physicians, physician practices, medical staff, and other provider organizations; skilled nursing, long term care, assisted living, home health, ambulatory surgery, dialysis, telemedicine, DME, Pharma, clinics, and other health care providers; billing, management and other administrative services organizations; insured, self-insured, association and other health plans; PPOs, HMOs and other managed care organizations, insurance, claims administration, utilization management, and other health care payers; public and private peer review, quality assurance, accreditation and licensing; technology and other outsourcing; healthcare clearinghouse and other data; research; public and private social and community organizations; real estate, technology, clinical pathways, and other developers; investors, banks and financial institutions; audit, accounting, law firm; consulting; document management and recordkeeping, business associates, vendors, and service providers and other professional and other health industry organizations; academic medicine; trade associations; legislative and other law making bodies and others.

A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, privacy and data security, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns.

A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; a ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.

For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here.

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.

NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice or an offer or commitment to provide legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as legal advise or an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.

©2018 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press, Inc.™ For information about republication, please contact the author directly. All other rights reserved.


DOL Spending Reports Required As Taxpayer Tool Need Improvement

January 24, 2018

Department of Labor (DOL) and other agencies’ spending reports posted at USASpending.gov to comply withthe Digital Accountability and Transparency Act of 2014 (DATA Act) are intended to help taxpayers, government leaders and others monitor and evaluate agency spending. However a new report from the DOL Office of Inspector General (OIG) found data reporting and other issues have compromised the reliability of the data reported in DOL reports posed on USASpending.gov.

The Data Act requires federal agencies to report spending data in accordance with new government-wide data standards developed by the Office of Management and Budget (OMB) and the Department of Treasury (Treasury).  The data reports are posted on  so taxpayers and policy makers understand how the Department is spending its funds. The Act requires federal agencies to report spending data in accordance with new government-wide data standards developed by the Office of Management and Budget (OMB) and the Department of Treasury (Treasury). The Act also requires the Inspectors General of each federal agency to conduct a review of the agency’s DATA Act compliance every two years and report on the completeness, timeliness, accuracy, and quality of the agency’s data.

The new report reports OIG’s findings from a performance audit OIG performed to assess: (1) the completeness, timeliness, accuracy, and quality of data submitted by the Department; and (2) the Department’s implementation and use of the Government-wide data standards established by OMB and Treasury for the Fiscal Year 2017 second quarter. While OIG found DOL effectively implemented and used the Government-wide data standards established by OMB and Treasury to prepare the reports and timely submitted the DATA Act required reports, it found numerous issues with the overall quality of the spending data it submitted for publication on USAspending.gov. Among other things, OIG reports that DOL:

  • Did not report all the required data elements for 19 percent of the transactions sampled. OIG found 77% of these errors occurred because the Department did not include Unique Record Identifiers for transactions when it was required to. This could cause issues when linking financial data with grant data on USAspending.gov.
  • 74% of the transactions sampled contained an error in one or more data elements. OIG reports many of these errors resulted from issues in the Treasury’s DATA Act broker data extraction process.
  • Excluding those errors, 52% of the transactions sampled contained inaccurate information.
  • In addition to errors uncovered from OIG’s sampling audit, DOL also reported inaccurate program activity and object class codes for 5 and 7 percent of transactions, respectively, in its File B submission.

OIG attributes these errors in accuracy and completeness occurred because of data entry mistakes, data extraction issues, and weak data validation processes and concluded that these control deficiencies will have a negative impact on the quality of the data DOL reports until corrected.

Based on these findings, OIG  has made eight recommendations to DOL’s Principal Deputy Chief Financial Officer to improve the quality of the data the DOL reports to USAspending.gov in the future and to strengthen internal controls over its data management processes.

While OIG reports DOL has concurred with these recommendations and has stated it has implemented additional controls, resulting in fewer errors with each submission, taxpayers and others using past reports need to consider the reported deficiencies in their evaluation and use of the data as well as assess the validity of future reported data for possible issues for future assessments.  Even considering these issues, however, taxpayers and government leaders should consider  consulting the data when investigating or evaluating DOL or other program activities or expenditures for policy, enforcement priority or other purposes.

About The Author

A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation; Former Chair of the RPTE Employee Benefits and Compensation Committee, a current Co-Chair of the Committee, and the former Chair of its Welfare Benefit and its Defined Compensation Plan Committees and former RPTE Joint Committee on Employee Benefits Council (JCEB) Representative, Cynthia Marcotte Stamer is a Martindale-Hubble “AV-Preeminent” practicing attorney and management consultant, author, public policy advocate, author and lecturer repeatedly recognized for her 30 plus years’ of work and pragmatic thought leadership, publications and training on health, pension and other employee benefit,  insurance, labor and employment, and health care  fiduciary responsibility, payment, investment, contracting  and other design, administration and compliance concerns as among the “Top Rated Labor & Employment Lawyers in Texas,” a “Legal Leader,” a “Top Woman Lawyer” and with other awards by LexisNexis® Martindale-Hubbell®; as among the “Best Lawyers In Dallas” for her work in the field of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, in International Who’s Who of Professionals and with numerous other awards and distinctions.

Highly valued for her ability to meld her extensive legal and industry knowledge and experience with her talents as an insightful innovator and pragmatic problem solver, Ms. Stamer advises, represents and defends employer, union, multi-employer, association and other employee benefit plan sponsors, insurers and managed care organizations, fiduciaries, plan administrators, technology and other service providers, government and community leaders and others about health and other employee benefit and insurance program and policy design and innovation, funding, documentation, administration, communication, data security and use, contracting, plan, public and regulatory reforms and enforcement, and other risk management, compliance and operations matters. Her experience encompasses leading and supporting the development and defense of innovative new policies, programs, practices and solutions; advising and representing clients on routine plan establishment, plan documentation and contract drafting and review, administration, change and other compliance and operations; crisis prevention and response, compliance and risk management audits and investigations, enforcement actions and other dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, Federal Trade Commission, Justice, Securities and Exchange Commission, Education and other federal agencies, state legislatures, attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators, and various other foreign and domestic governmental bodies and agencies. She also provides strategic and other supports clients in defending litigation as lead strategy counsel, special counsel and as an expert witness. Alongside her extensive legal and operational experience, Ms. Stamer also is recognized for her work as a public and regulatory policy advocate and community leader with a gift for finding pragmatic solutions and helping to forge the common ground necessary to build consensus. Best known for her domestic public policy and community leadership on health care and insurance reform, Ms. Stamer’s lifelong public policy and community service involvement includes service as a lead consultant to the Government of Bolivia on its pension privatization project, as well as extensive legislative and regulatory reform, advocacy and input workforce, worker classification, employee benefit, public health and healthcare, social security and other disability and aging in place, education, migration reforms domestically and internationally throughout her adult life. In addition to her public and regulatory policy involvement, Ms. Stamer also contributes her service and leadership to a professional and civic organizations and efforts including her involvement as the Founder and Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE; Coalition on Patient Empowerment, a founding Board Member and past President of the Alliance for Healthcare Excellence; Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; Vice Chair, Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group; current Fiduciary Responsibility Committee Co-Chair and Membership Committee member of the ABA RPTE Section; former RPTE Employee Benefits and Other Compensation Group Chair, former Chair and Co-Chair of its Welfare Plans Committee, and Defined Contribution Plans Committee; former RPTE Representative to ABA Joint Committee on Employee Benefits Council; former RPTE Representative to the ABA Health Law Coordinating Counsel; former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, former Board Member, Continuing Education Chair and Treasurer of the Southwest Benefits Association; Vice President of the North Texas Healthcare Compliance Professionals Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; past Dallas World Affairs Council Board Member, and in leadership of many other professional, civic and community organizations. Ms. Stamer also is a highly popular lecturer, symposia chair and author, who publishes and speaks extensively on health and managed care industry, human resources, employment and other privacy, data security and other technology, regulatory and operational risk management for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, the Society of Professional Benefits Administrators, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients, serves on the faculty and planning committee of many workshops, seminars, and symposia, and on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.

Beyond these involvements, Ms. Stamer also is active in the leadership of a broad range of other public policy advocacy and other professional and civic organizations and involvements. Through these and other involvements, she helps develop and build solutions, build consensus, garner funding and other resources, manage compliance and other operations, and take other actions to identify promote tangible improvements in health care and other policy and operational areas.

Before founding her current law firm, Cynthia Marcotte Stamer, P.C., Ms. Stamer practiced law as a partner with several prominent national and international law firms for more than 10 years before founding Cynthia Marcotte Stamer, P.C. to practice her unique brand of “Solutions law™” and to devote more time to the pragmatic policy and system reform, community education and innovation, and other health system improvement efforts of her PROJECT COPE: the Coalition on Patient Empowerment initiative.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources at SolutionsLawPress.com such as the following:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please provide your current contact information and preferences including your preferred e-mail by creating or updating your profile here.

NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.

©2018 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions  Law Press, Inc.™   For information about republication, please contact the author directly.  All other rights reserved.


Read Trump Health Care Executive Order

October 12, 2017

President Trump today (October 12, 2017) issued the following that he promised to be the first in a series of executive orders and other administrative actions that his administration will roll out to provide Obamacare relief  for consumers, employers and others by promoting healthcare choice and competition given the continued difficulty by the Republican-led Congress to pass legislation repealing or replacing the health care law.

What actually will result remains to be seen.  Like the January 20, 2017 Executive Order Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal that President Trump signed as his first executive order, the new Executive Order doesn’t actually change anything; it merely directs the agencies to review and propose for implementation changes to regulations and other guidance allowed by law.

On the heels of his announcement of the Executive Order, President Trump moved forward on his promise to take other action on Obamacare by announcing that the Administration will not continue funding for individual subsidies that currently are continued under an Obama Administration action in the absence of Congressional action funding those subsidies.

Concerned parties should monitor and inform themselves about proposed changes in the Executive Order and other actions as they are proposed and develop, and provide timely comments and other input to help influence the shape and content of any changes proposed or adopted in response to the Executive Order.  Solutions Law Press, Inc. will be monitoring developments.   Stay tuned for updates.

Language of Executive Order

By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows:

Section 1. Policy.

(a) It shall be the policy of the executive branch, to the extent consistent with law, to facilitate the purchase of insurance across State lines and the development and operation of a healthcare system that provides high-quality care at affordable prices for the American people. The Patient Protection and Affordable Care Act (PPACA), however, has severely limited the choice of healthcare options available to many Americans and has produced large premium increases in many State individual markets for health insurance. The average exchange premium in the 39 States that are using http://www.healthcare.gov in 2017 is more than double the average overall individual market premium recorded in 2013. The PPACA has also largely failed to provide meaningful choice or competition between insurers, resulting in one-third of America’s counties having only one insurer offering coverage on their applicable government-run exchange in 2017.

(b) Among the myriad areas where current regulations limit choice and competition, my Administration will prioritize three areas for improvement in the near term: association health plans (AHPs), short-term, limited-duration insurance (STLDI), and health reimbursement arrangements (HRAs).

(i) Large employers often are able to obtain better terms on health insurance for their employees than small employers because of their larger pools of insurable individuals across which they can spread risk and administrative costs. Expanding access to AHPs can help small businesses overcome this competitive disadvantage by allowing them to group together to self-insure or purchase large group health insurance. Expanding access to AHPs will also allow more small businesses to avoid many of the PPACA’s costly requirements. Expanding access to AHPs would provide more affordable health insurance options to many Americans, including hourly wage earners, farmers, and the employees of small businesses and entrepreneurs that fuel economic growth.

(ii) STLDI is exempt from the onerous and expensive insurance mandates and regulations included in title I of the PPACA. This can make it an appealing and affordable alternative to government-run exchanges for many people without coverage available to them through their workplaces. The previous administration took steps to restrict access to this market by reducing the allowable coverage period from less than 12 months to less than 3 months and by preventing any extensions selected by the policyholder beyond 3 months of total coverage.

(iii) HRAs are tax-advantaged, account-based arrangements that employers can establish for employees to give employees more flexibility and choices regarding their healthcare. Expanding the flexibility and use of HRAs would provide many Americans, including employees who work at small businesses, with more options for financing their healthcare.

(c) My Administration will also continue to focus on promoting competition in healthcare markets and limiting excessive consolidation throughout the healthcare system. To the extent consistent with law, government rules and guidelines affecting the United States healthcare system should:

(i) expand the availability of and access to alternatives to expensive, mandate-laden PPACA insurance, including AHPs, STLDI, and HRAs;

(ii) re-inject competition into healthcare markets by lowering barriers to entry, limiting excessive consolidation, and preventing abuses of market power; and

(iii) improve access to and the quality of information that Americans need to make informed healthcare decisions, including data about healthcare prices and outcomes, while minimizing reporting burdens on affected plans, providers, or payers.

Sec. 2. Expanded Access to Association Health Plans.

Within 60 days of the date of this order, the Secretary of Labor shall consider proposing regulations or revising guidance, consistent with law, to expand access to health coverage by allowing more employers to form AHPs. To the extent permitted by law and supported by sound policy, the Secretary should consider expanding the conditions that satisfy the commonality‑of-interest requirements under current Department of Labor advisory opinions interpreting the definition of an “employer” under section 3(5) of the Employee Retirement Income Security Act of 1974. The Secretary of Labor should also consider ways to promote AHP formation on the basis of common geography or industry.

Sec. 3. Expanded Availability of Short-Term, Limited‑Duration Insurance.

Within 60 days of the date of this order, the Secretaries of the Treasury, Labor, and Health and Human Services shall consider proposing regulations or revising guidance, consistent with law, to expand the availability of STLDI. To the extent permitted by law and supported by sound policy, the Secretaries should consider allowing such insurance to cover longer periods and be renewed by the consumer.

Sec. 4. Expanded Availability and Permitted Use of Health Reimbursement Arrangements.

Within 120 days of the date of this order, the Secretaries of the Treasury, Labor, and Health and Human Services shall consider proposing regulations or revising guidance, to the extent permitted by law and supported by sound policy, to increase the usability of HRAs, to expand employers’ ability to offer HRAs to their employees, and to allow HRAs to be used in conjunction with nongroup coverage.

Sec. 5. Public Comment.

The Secretaries shall consider and evaluate public comments on any regulations proposed under sections 2 through 4 of this order.

Within 180 days of the date of this order, and every 2 years thereafter, the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor and the Federal Trade Commission, shall provide a report to the President that:

(a) details the extent to which existing State and Federal laws, regulations, guidance, requirements, and policies fail to conform to the policies set forth in section 1 of this order; and

(b) identifies actions that States or the Federal Government could take in furtherance of the policies set forth in section 1 of this order.

Sec. 7. General Provisions.

(a) Nothing in this order shall be construed to impair or otherwise affect:

(i) the authority granted by law to an executive department or agency, or the head thereof; or

(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.

(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

DONALD J. TRUMP

THE WHITE HOUSE,

October 12, 2017

Implications & Actions

The impact of this and other Executive Orders and other Presidential actions depend upon what actions, if any, the agencies determine they are allowed by law to take and how those changes are implemented.  Concerned persons and organizations should begin preparing input to the agencies and monitoring and commenting on proposals and other guidance to help shape the outcome.

Solutions Law Press, Inc. is preparing initial analysis of this Executive Order and will be closely monitoring and updating this analysis.  Follow up to learn more and stay abreast of new developments.

About The Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for management work, coaching, teachings, and publications.

Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce, internal controls and regulatory compliance, change management and other performance and operations management and compliance. Her day-to-day work encompasses both labor and employment issues, as well as independent contractor, outsourcing, employee leasing, management services and other nontraditional service relationships. She supports her clients both on a real-time, “on demand” basis and with longer term basis to deal with all aspects for workforce and human resources management, including, recruitment, hiring, firing, compensation and benefits, promotion, discipline, compliance, trade secret and confidentiality, noncompetition, privacy and data security, safety, daily performance and operations management, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.

Well-known for her extensive work with health, insurance, financial services, technology, energy, manufacturing, retail, hospitality, governmental and other highly regulated employers, her nearly 30 years’ of experience encompasses domestic and international businesses of all types and sizes. Author of numerous works on privacy and data security, Ms. Stamer‘s experience includes involvement in cyber security and other data privacy and security matters for more than 20 years.

A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other concerns by her service as a management consultant,  business coach and consultant and policy strategist as well through her leadership participation in professional and civic organizations such her involvement as the Vice Chair of the North Texas Healthcare Compliance Association; Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE: Coalition on Patient Empowerment; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; former Gulf Coast TEGE Council Exempt Organization Coordinator; a founding Board Member and past President of the Alliance for Healthcare Excellence; former board member and Vice President of the Managed Care Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; a member and policy adviser to the National Physicians’ Council for Healthcare Policy; current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section; Past Chair of the ABA Health Law Section Managed Care & Insurance Section; ABA Real Property Probate and Trust (RPTE) Section former Employee Benefits Group Chair, immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative, and Defined Contribution Committee Co-Chair, past Welfare Benefit Committee Chair and current Employee Benefits Group Fiduciary Responsibility Committee Co-Chair, Substantive and Group Committee member, Membership Committee member and RPTE Representative to the ABA Health Law Coordinating Council; past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a former member of the Board of Directors, Treasurer, Member and Continuing Education Chair of the Southwest Benefits Association and others.

Ms. Stamer also is a widely published author, highly popular lecturer, and serial symposia chair, who publishes and speaks extensively on human resources, labor and employment, employee benefits, compensation, occupational safety and health, and other leadership, performance, regulatory and operational risk management, public policy and community service concerns for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications.

Want to know more? See here for details about the author of this update, attorney Cynthia Marcotte Stamer, e-mail her here or telephone Ms. Stamer at (469) 767-8872.

About Solutions Law Press, Inc.™

 Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources at SolutionsLawPress.com such as the following:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please provide your current contact information and preferences including your preferred e-mail by creating or updating your profile here.

NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.

©2017 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions  Law Press, Inc.™   For information about republication, please contact the author directly.  All other rights reserved.


Learn About Rising Group Health Plan Mental Health Mandate Risks From 6/27 “2017 Federal Group Health Plan Mental Health Rules Update”

June 22, 2017

Register Now To Participate In 

“2017 Federal Group Health Plan Mental Health Rules Update

Solutions Law Press, Inc™ Health Plan Update WebEx Briefing  

Tuesday, June 27, 2017

10:30 A.M.-11:30 P.M. Eastern | 11:30 A.M.-12:30 P.M. Central

EXPANDING REGULATORY REQUIREMENTS & ENFORCEMENT SPELL TROUBLE FOR HEALTH PLANS AND THEIR SPONSORING EMPLOYERS.

Solutions Law Press, Inc.™ invites employer and other group health plan sponsors, fiduciaries, insurers, administrative service providers, plan brokers and consultants are invited learn critical information about their expanding risks and responsibilities arising from existing and proposed changes to rules and enforcement of federal group health plan mental health and substance abuse (MH/SUB) coverage and privacy rules under the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), as supplemented by the Patient Protection and Affordable Care Act (ACA) and the 21st Century Cures Act (Cures Act) and the Privacy Rules of the Health Insurance Portability & Accountability Act (HIPAA) conducted by attorney Cynthia Marcotte Stamer, a Fellow in the American College of Employee Benefits recognized as among the “Best Lawyers” in employee benefits for her health and other benefit knowledge, experience, policy advocacy and thought leadership.  Register here now!

Tightening Health Plan Mental Health & Substance Abuse Rules & Enforcement Make Group Health Plan Compliance Critical

New and proposed guidance jointly published June 16, 2017 by the Departments of Labor (DOL), Health & Human Services (HHS) and Treasury is the latest in a series of regulatory and enforcement developments over the past year alerting  group health plans and their employer and other group health plan sponsors, fiduciaries, insurers, administrative services providers, plan brokers and consultants involved in health plan design, funding, or administration to get serious about their group health plans’ compliance with the MHPAEA federal group health plan mental health and substance abuse coverage and benefit requirements, as supplemented by the ACA and the Cures Act without running afoul of the Privacy Rules of HIPAA.

Building upon federal group health plan mental health parity mandates originally implemented under the Mental Health Parity Act, the MHPAEA generally requires that any financial requirements or treatment limitations group health plans impose on mental health and substance use disorder (MH/SUD) benefits not be restrictive than the predominant financial requirements and treatment limitations that apply to substantially all medical and surgical benefits. MHPAEA also imposes several disclosure requirements on group health plans and health insurance issuers.  Not satisfied with the MHPAEA coverage and disclosure protections, however, Congress subsequently broadened federal MH/SUD benefit rights under group health plans through the enactment of the ACA and the Cures Act.  Congress also has imposed special requirements and protections for mental health treatment records adds additional responsibilities for group health plans and their service providers when dealing with information and records in connection with the administration of MH/SUD benefits.

After a long period of lax oversight and enforcement of these federal group health plan mental health rules, the Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (collectively, the Departments) since October, 2016 have begun both tightening the rules and acting to increase oversight and enforcement.  The Departments have issued a series of joint guidance clarifying and broadening their interpretations of these MH/SUD benefit and disclosure mandates while simultaneously taking steps to increase awareness and enforcement of these rights.  As part of these ongoing efforts, Departments’ on June 16, 2017 expanded this guidance with their publication of new Mental Health Parity Implementation FAQs Part 38 discussing their joint interpretation of the broadening effect of the enactment of the ACA and the Cure Act on these plan requirements.  Concurrently, the Departments signaled their intention to add additional responsibilities for group health plans and insurers by publishing along with FAQ Part 38 a Draft MHPAEA Disclosure Template and request for comments.  This latest guidance package reaffirms that the Departments are continuing efforts to increase oversight of and enforcement of MH/SUD compliance against group health plans, their sponsors, fiduciaries, insurers, and their administrative and other service providers.  In the face of these developments and the reported initiation of enforcement actions by the Departments, the group health plans, their employer and other sponsors, fiduciaries, insurers, and their administrative and other service providers should move quickly to understand and update their plans and practices to comply with these recent developments while bracing for the likely need to deal with further expanded disclosure and other additional responsibilities under the MHPAEA jointly proposed by the Departments on June 16, 2017.

Beyond fulfilling these expanding MHPAEA responsibilities, health plan fiduciaries, administrators, insurers and sponsors also must ensure their health plan and its business associates comply with  special rules concerning the protection, use and disclosure of mental health treatment records and information that may impact certain mental health treatment and other records received, used, retained or disclosed in the course of administering mental health, substance abuse or other provisions of their group health plans under the HIPAA Privacy Rules.  Keeping in mind that HHS audit and enforcement of compliance by health plans and other HIPAA covered entities with HIPAA’s medical privacy and data security rules, health plan sponsors, fiduciaries, insurers and administrative and other service providers also should take the opportunity to verify that their plans and practices comply with special HIPAA rules impacting authorizations and other dealings with certain mental health and substance abuse health information and records and other HIPAA medical privacy and security requirements.

Given these developments, group health plans, their sponsors, fiduciaries, insurers and administrator must take steps to verify and maintain compliance with these federal MH/SUD requirements.  Ensuring proper compliance with these federal rules is particularly important to avoid triggering the substantial liability that health plans, their employer and other sponsors, insurers, and administrators can incur if their health plan violates these mandates.  Obviously, plans and their sponsors, insurers and fiduciaries can expect to pay additional plan expenses necessary to pay wrongfully denied benefits and other expenditures these plan or its fiduciaries expend to investigate, defend and resolve claims or compliance audits, investigations, litigation or actions brought by the Departments, state insurance regulators with respect to state governments or insurers, or private litigation by participants or beneficiaries.  Many employer or other plan sponsors may be unaware that these violations also generally expose employers and other health plan sponsors to liability to self identify, self-report on Internal Revenue Service Form 8928 and self-pay and excise tax of up to $100 per participant per day per uncorrected violation by the due date for filing of their annual corporate tax return.

With oversight and enforcement already rising and the Departments proposing to expand further both disclosure duties and enforcement, group health plans, their employer and other sponsors, insurers, fiduciaries and administrators clearly need to take prompt action to verify their existing health plan provisions and administrative practices are up-to-date and administered to withstand challenge from the Departments, participants, beneficiaries, health care providers and others. Consequently, employer and other group health plan sponsors, fiduciaries, insurers, administrative services providers, plan brokers and consultants involved in health plan design, funding, or administration should act quickly to verify their plan terms and practices are updated to comply with existing rules and share their input in response to the Departments June 16, 2017 requests for comments.

ABOUT CYNTHIA MARCOTTE STAMER

Recognized as “Legal Leader™ Texas Top Rated Lawyer” in both Health Care Law and Labor and Employment Law, a “Texas Top Lawyer,” and an  “AV-Preeminent” and “Top Rated Lawyer” by Martindale-Hubble, singled out as among the “Best Lawyers In Dallas” in employee benefits by D Magazine; Cynthia Marcotte Stamer is a practicing attorney and management consultant, author, public policy advocate and lecturer widely recognized for her nearly 30 years’ of work and pragmatic thought leadership, publications and training on health coverage and health care, health plan and employee benefits, workforce and related regulatory and other compliance, performance management, risk management, product and process development, public policy, operations and other concerns.

Throughout her legal and consulting career, Ms. Stamer has  drawn recognition for combining extensive knowledge and experience with her talents as an insightful innovator and problem solver when advising, representing and defending employer and other plan sponsors, insurers, fiduciaries, insurers, electronic and other technology, plan administrators and other service providers, governments and others about health coverage, benefit program design, funding, documentation, administration, data security and use, contracting, plan, public and regulatory reforms and enforcement, and other risk management and operations matters  as well as for her work and thought leadership on a broad range of other health,  employee benefits, human resources and other workforce, insurance, tax, compliance and other matters.  Her experience encompasses leading and supporting the development and defense of innovative new programs, practices and solutions; advising and representing clients on routine plan establishment, plan documentation and contract drafting and review, administration, change and other compliance and operations crisis prevention and response, compliance and risk management audits and investigations, enforcement actions and other dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, Federal Trade Commission, Justice, state legislatures, attorneys general, insurance, labor, worker’s compensation, and other agencies and regulators,  She also provides strategic and other supports clients in defending litigation as lead strategy counsel, special counsel and as an expert witness.

A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares shared her thought leadership, experience and advocacy on these and other concerns by her service in the leadership of a broad range of other professional and civic organization including her involvement as Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE; Coalition on Patient Empowerment, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, Past Group Chair, current Defined Contribution Plan Committee Co-Chair, former Welfare Committee Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative and current RPTE Representative to the ABA Health Law Coordinating Counsel, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, former member of the Board of Directors of the Southwest Benefits Association and others.

Ms. Stamer also is a highly popular lecturer, symposia chair and author, who publishes and speaks extensively on health and managed care industry, human resources, employment and other privacy, data security and other technology, regulatory and operational risk management for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, the Society of Professional Benefits Administrators, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other symposia and publications.  She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients, serves on the faculty and planning committee of many workshops, seminars, and symposia, and on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications. For additional information about Ms. Stamer, see CynthiaStamer.com or contact Ms. Stamer via email to here or via telephone to (469) 767-8872.

About Solutions Law Press

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources at www.SolutionsLawPress.com.

If you or someone else you know would like to receive future updates and notices about other upcoming Solutions Law Press™ events, please be sure that we have your current contact information – including your preferred e-mail by creating or updating your profile here.  For important information concerning this communication, see here.

NOTICE:  Any party accessing or using any content obtained from or through Solutions Law Press, Inc.™ acknowledges and agrees that any and all programs, publications, statements and materials presented or published by Solutions Law Press, Inc.™ and any statements or other contents made or contained therein are for general informational and educational purposes only. They are generic in nature and not tailored or intended to be relied upon by any person, business, entity or other party for purposes for determining the legal, financial or other appropriateness, defensibility, suitability, outcome or consequences of any strategy, action, course of action, or any other facts, circumstances, event or conduct.  Users of these resources are responsible at all times for independently evluating the suitability of any content, materials, tools or other materials or information accessed from or through Solutions Law Press, Inc. directly or indirectly.

Solutions Law Press, Inc.™ and its authors and contributors do not represent or warrant in any form or manner, and expressly disclaim and deny the appropriateness of the use or reliance of any person or entity on any content, tools or resources accessed or obtained from or through Solutions Law Press, Inc.™ for any general or particular use or purpose by any party under any circumstances.

Likewise, they do not establish an attorney-client relationship or other fiduciary, contractual or other relationship between Solutions Law Press, Inc. and/or any of its authors or contributors and any other party.  They are not, and do not serve as a substitute for legal, accounting, tax or other advice.  They don’t create or otherwise give rise to any duty, obligation, responsibility on behalf of Solutions Law Press, Inc™ or any provider or offeree of content, tools or services to any party.

Parties accessing or using any of Solutions Law Press, Inc.™  competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission. The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The publisher and the author expressly disclaim all liability for this content and any responsibility to provide any update or otherwise notify anyone of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.

©2017 Solutions Law Press. All rights reserved.


 

 

 

 

 

 

 


$2.4M HIPAA Settlement Message Warns Health Plans & Providers Against Sharing Medical Info With Media, Others

May 10, 2017

Healthcare providers, health plans, healthcare clearinghouses and their business associates (Covered Entities) can’t disclose the name or other protected health care information about a patient in press releases or other announcements without prior authorization from the patient. That’s the clear lesson Covered Entities should learn from the $2.4 million payment to the U.S. Department of Health and Human Services (HHS) that the largest not-for-profit health system in Southeast Texas, Memorial Hermann Health System (MHHS) is paying to settle charges it violated the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule by issuing a press release with the name and other protected health information (PHI) about a patient without the patient’s prior HIPAA-compliant authorization under a Resolution Agreement and Corrective Action Plan (Resolution Agreement) announced May 10, 2017 by HHS Office of Civil Rights (OCR).

The Resolution Agreement resolves OCR charges the operator of 13 hospitals, eight Cancer Centers, three Heart & Vascular Institutes, and 27 sports medicine and rehabilitation centers violated the Privacy Rule that resulted from an OCR compliance review of MHHS triggered by multiple media reports suggesting that MHHS improperly disclosed the name and other details about a patient arrested and charged with presenting an allegedly fraudulent identification card to office staff at an MHHS’s clinic after MHHS clinic staff alerted law enforcement of suspicions the patient was presenting false identification to the clinic. According to OCR, after law enforcement investigated and arrested the patient, MHHS published a press release concerning the incident in which MHHS senior management approved the impermissible disclosure of the patient’s PHI by adding the patient’s name in the title of the press release without securing prior authorization of the patient.

While OCR concluded the report to law enforcement allowable under the Privacy Rule, OCR found MHHS violated the Privacy Rule by issuing the press release disclosing the patient’s name and other PHI without authorization from the patient and also by failing to timely document the sanctioning of its workforce members for impermissibly disclosing the patient’s information.

To resolve and avoid the potential Civil Monetary Penalties that HIPAA could authorize OCR to impose for the alleged Privacy Rule violation, MHHS agrees in the Resolution Agreement to pay OCR a $2.4 million monetary settlement and implement a corrective action plan that obligates MHHS to update and train its workforce on its policies and procedures on safeguarding PHI from impermissible uses and disclosures including specific instructions and procedures to:

  • Address (a) Uses and disclosures for which an authorization is required, including to the media, to public officials, and on the internet; (b) Disclosures for law enforcement purposes; and (c) Uses and disclosures for health oversight activities;
  • Identify MHHS personnel or representatives whom workforce members, agents, or business associates may contact in the event of any inquiry or concern regarding compliance with HIPAA in relation to these activities;
  • Internal reporting procedures requiring all workforce members to report to the designated person or office at the earliest possible time any potential violations of the Privacy, Security or Breach Notification Rules or of MHHS’ privacy and security policies and procedures and MHHS promptly to investigate and address all received reports in a timely manner; and
  • Application and documentation of appropriate sanctions (which may include retraining or other instructive corrective action, depending on the circumstances) against members of MHHS’ workforce, including senior level management, who fail to comply with the Privacy, Security or Breach Notification Rules or MHHS’ privacy and security policies and procedures, including a description of the sanctions; a timeframe in which MHHS will apply and document sanctions for violations of the HIPAA Rules or of MHHS’ privacy, security or breach policies or procedures; the manner in which MHHS will document the sanctions; and where MHHS will store or retain such documentation (e.g., personnel file).

The corrective action plan in the Resolution Agreement also requires all MHHS facilities to attest to their understanding of permissible uses and disclosures of PHI, including disclosures to the media and others.

Covered entities should keep in mind the MHHS Resolution Agreement is the latest in a series of OCR enforcement actions and resolution agreements highlighting the need for Covered Entities to adopt and use appropriate policies and procedures to prevent wrongful disclosures of PHI to the media or public. For instance, in June, 2013, OCR required Shasta Regional Medical Center (SRMC) to pay a $275,000 settlement payment and implement a comprehensive corrective action plan to resolve OCR charges stemming from SRMC’s disclosure of PHI about a patient to members of the media and its workforce in an effort to respond to accusations the patient made that SRMC engaged in fraud and other misconduct. See HIPAA Sanctions Triggered From Covered Entity Statements To Media, Workforce.  In contrast, the $2.2 million resolution agreement that OCR required New York Presbyterian Hospital for improperly allowing a film crew to film hospital patients in violation of HIPAA was almost 10 times greater than the SRMC penalty and was accompanied by OCR’s publication OCR of specific additional guidance warning Covered Entities against improper disclosures to the media. See $2 Million+ HIPAA Settlement, FAQ Warn Providers Protect PHI From Media, Other Recording Or Use.

Following on the heels of this previous guidance and prior enforcement actions warning Covered Entities against wrongful disclosure to the media, the MHHS Resolution Agreement sends a strong message to Covered Entities that they should expect little sympathy if their organizations improperly share PHI with the media. OCR’s announcement of the MHHS Resolution Agreement, for instance quotes OCR Director Roger Severino with stating that “Senior management should have known that disclosing a patient’s name on the title of a press release was a clear HIPAA Privacy violation that would induce a swift OCR response.” The announcement goes on to quote Director Severino further as stating, “This case reminds us that organizations can readily cooperate with law enforcement without violating HIPAA, but that they must nevertheless continue to protect patient privacy when making statements to the public and elsewhere.”

Conduct Entity-Wide Risk Assessment & Review & Tighten Media Relations Policies, Processes & Training ASAP

Covered entities should heed the warning by conducting a risk assessment of their organization’s susceptibility to potential improper disclosures to media or others and reviewing and implementing necessary written policies, procedures and training to prevent the improper disclosure of patient PHI to media or others unless the Covered Entity either secures prior HIPAA-compliant authorization from the patient or can prove the disclosure falls squarely under an exception to the Privacy Rule’s prohibition against disclosure of PHI without authorization except as allowed by the Privacy Rule.

Taking these and other needed steps to evaluate, and strengthen and enforce as needed, risk assessments, policies, procedures, and training to prevent wrongful use, access or disclosure of PHI to the media or others is particularly critical in light of the ongoing tightening of expectations, and rising enforcement and sanctions for HIPAA violations since Congress amended HIPAA in 2009. See OCR Audit Program Kickoff Further Heats HIPAA Privacy RisksHIPAA Heats Up: HITECH Act Changes Take Effect & OCR Begins Posting Names, Other Details Of Unsecured PHI Breach Reports On Website

Based on experiences reported in the MHHS and other similar resolution agreements, Covered Entities also generally will want to ensure that their policies, procedures and training extend to all potential sources of communications that could involve patient information and make clear that the Privacy Rule restrictions must be followed even if the circumstances involve allegations of misconduct, special performance by healthcare providers or others that it would benefit the organization or certain individuals to have known to the public, or other circumstances likely to be of interest to the media or other parties.

As part of this process, covered entities should ensure they look outside the four corners of their Privacy Policies to ensure that appropriate training and clarification is provided to address media, practice transition, workforce communication and other policies and practices that may be covered by pre-existing or other policies of other departments or operational elements not typically under the direct oversight and management of the Privacy Officer such as media relations.  Media relations, physician and patients affairs, outside legal counsel, media relations, marketing and other internal and external departments and consultants dealing with the media, the public or other inquiries or disputes should carefully include and coordinate with the privacy officer both to ensure appropriate policies and procedures are followed and proper documentation created and retained to show authorization, account, or meet other requirements.

In conducting this analysis and risk assessment, it will be important that Covered Entities include, but also look beyond the four corners of their Privacy Policies to ensure that their review and risk assessment identifies and assesses and addresses compliance risks on an entity wide basis. This entity-wide assessment should include both communications and requests for information normally addressed to the Privacy Officer as well as requests and communications that could arise in the course of media or other public relations, practice transition, workforce communication and other operations not typically under the direct oversight and management of the Privacy Officer.  For this reason, Covered Entities also generally will not only to adopt and implement specific policies, processes and training in these other departments to prohibit and prevent inappropriate disclosures of PHI in the course of those departments operations. It also may be advisable to pre-established processes for reviewing media or other communications for potential PHI content and require prior review of any proposed public relations and other internal or external communications containing patient PHI or other information by the privacy officer, legal counsel or another suitably qualified party.

Because of the high risk that the preparation or review of media or other public communications reports will involve the use and disclosure of PHI, Covered Entities also generally should verify that all outside media or public relations, legal, or other outside service providers participating in the investigation, response or preparation or review of communications to the media or others both are covered by signed business associate agreements that fulfill the Privacy Rule and other requirements of HIPAA as well as possess detailed knowledge and understanding of the Privacy and Security Rules suitable to participate in and help safeguard the Covered Entity against violations of these and other Privacy Rules.  See e.g., Latest HIPAA Resolution Agreement Drives Home Importance Of Maintaining Current, Signed Business Associate Agreements.

About The Author

Recognized by LexisNexis® Martindale-Hubbell® as a “AV-Preeminent” (Top 1%/ the highest) and “Top Rated Lawyer,” with special recognition as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Health Care,” “Labor & Employment,” “Tax: Erisa & Employee Benefits” and “Business and Commercial Law” by D Magazine, the author of this update is widely known for her 29 plus years’ of work in health care, health benefit, health policy and regulatory affairs and other health industry concerns as a practicing attorney and management consultant, thought leader, author, public policy advocate and lecturer.

Throughout her adult life and nearly 30-year legal career, Ms. Stamer’s legal, management and governmental affairs work has focused on helping health industry, health benefit and other organizations and their management use the law, performance and risk management tools and process to manage people, performance, quality, compliance, operations and risk. Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer supports these organizations and their leaders on both a real-time, “on demand” basis as well as outsourced operations or special counsel on an interim, special project, or ongoing basis with strategic planning and product and services development and innovation; workforce and operations management, crisis preparedness and response as well as to prevent, stabilize and cleanup legal and operational crises large and small that arise in the course of operations.

As a core component of her work, Ms. Stamer has worked extensively throughout her career with health care providers, health plans and insurers, managed care organizations, health care clearinghouses, their business associates, employers, banks and other financial institutions, management services organizations, professional associations, medical staffs, accreditation agencies, auditors, technology and other vendors and service providers, and others on legal and operational compliance, risk management and compliance, public policies and regulatory affairs, contracting, payer-provider, provider-provider, vendor, patient, governmental and community relations and matters including extensive involvement advising, representing and defending public and private hospitals and health care systems; physicians, physician organizations and medical staffs; specialty clinics and pharmacies; skilled nursing, home health, rehabilitation and other health care providers and facilities; medical staff, accreditation, peer review and quality committees and organizations; billing and management services organizations; consultants; investors; technology, billing and reimbursement and other services and product vendors; products and solutions consultants and developers; investors; managed care organizations, insurers, self-insured health plans and other payers; and other health industry clients to manage and defend compliance, public policy, regulatory, staffing and other operations and risk management concerns. A core focus of this work includes work to establish and administer compliance and risk management policies; comply with requirements, investigate and respond to Board of Medicine, Health, Nursing, Pharmacy, Chiropractic, and other licensing agencies, Department of Aging & Disability, FDA, Drug Enforcement Agency, OCR Privacy and Civil Rights, Department of Labor, IRS, HHS, DOD, FTC, SEC, CDC and other public health, Department of Justice and state attorneys’ general and other federal and state agencies; dealings with JCHO and other accreditation and quality organizations; investigation and defense of private litigation and other federal and state health care industry investigations and enforcement; insurance or other liability management and allocation; process and product development; managed care, physician and other staffing, business associate and other contracting; evaluation, commenting or seeking modification of regulatory guidance, and other regulatory and public policy advocacy; training and discipline; and a host of other related concerns for public and private health care providers, health insurers, health plans, technology and other vendors, employers, and others.

Author of leading works on HIPAA and other privacy and data security works and the scribe leading the American Bar Association Joint Committee on Employee Benefits Annual Agency Meeting with OCR, her experience includes extensive compliance, risk management and data breach and other crisis event investigation, response and remediation under HIPAA and other data security, privacy and breach laws.  Heavily involved in health care and health information technology, data and related process and systems development, policy and operations innovation and a Scribe for ABA JCEB annual agency meeting with OCR for many years who has authored numerous highly regarded works and training programs on trade secret, HIPAA and other medical, consumer, insurance, tax, and other  privacy and data security, Ms. Stamer also is widely recognized for her extensive work and leadership on leading edge health care and benefit policy and operational issues including meaningful use and EMR, billing and reimbursement, quality measurement and reimbursement, HIPAA, FACTA, PCI, trade secret, physician and other medical confidentiality and privacy, federal and state data security and data breach and other information privacy and data security rules and many other concerns.

In connection with this work, Ms. Stamer has worked extensively with health care providers, health plans, health care clearinghouses, their business associates, employers and other plan sponsors, banks and other financial institutions, and others on risk management and compliance with HIPAA, FACTA, trade secret and other information privacy and data security rules, including the establishment, documentation, implementation, audit and enforcement of policies, procedures, systems and safeguards, investigating and responding to known or suspected breaches, defending investigations or other actions by plaintiffs, OCR and other federal or state agencies, reporting known or suspected violations, business associate and other contracting, commenting or obtaining other clarification of guidance, training and enforcement, and a host of other related concerns. Her clients include public and private health care providers, health insurers, health plans, technology and other vendors, and others.

Her work includes both regulatory and public policy advocacy and thought leadership, as well as advising and representing a broad range of health industry and other clients about policy design, drafting, administration, business associate and other contracting, risk assessments, audits and other risk prevention and mitigation, investigation, reporting, mitigation and resolution of known or suspected violations or other incidents and responding to and defending investigations or other actions by plaintiffs, DOJ, OCR, FTC, state attorneys’ general and other federal or state agencies, other business partners, patients and others.

In addition to representing and advising these organizations, she also has conducted training on Privacy & The Pandemic for the Association of State & Territorial Health Plans, as well as HIPAA, FACTA, PCI, medical confidentiality, insurance confidentiality and other privacy and data security compliance and risk management for Los Angeles County Health Department, MGMA, ISSA, HIMMS, the ABA, SHRM, schools, medical societies, government and private health care and health plan organizations, their business associates, trade associations and others.

A former lead consultant to the Government of Bolivia on its Pension Privatization Project with extensive domestic and international public policy concerns in Pensions, healthcare, workforce, immigration, tax, education and other areas.

The American Bar Association (ABA) International Section Life Sciences Committee Vice Chair, a Scribe for the ABA Joint Committee on Employee Benefits (JCEB) Annual OCR Agency Meeting, former Vice President of the North Texas Health Care Compliance Professionals Association, past Chair of the ABA Health Law Section Managed Care & Insurance Section, past ABA JCEB Council Representative, past Board President of Richardson Development Center (now Warren Center) for Children Early Childhood Intervention Agency, past North Texas United Way Long Range Planning Committee Member, and past Board Member and Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer has worked closely with a diverse range of physicians, hospitals and healthcare systems, DME, Pharma, clinics, health care providers, managed care, insurance and other health care payers, quality assurance, credentialing, technical, research, public and private social and community organizations, and other health industry organizations and their management deal with governance; credentialing, patient relations and care; staffing, peer review, human resources and workforce performance management; outsourcing; internal controls and regulatory compliance; billing and reimbursement; physician, employment, vendor, managed care, government and other contracting; business transactions; grants; tax-exemption and not-for-profit; licensure and accreditation; vendor selection and management; privacy and data security; training; risk and change management; regulatory affairs and public policy and other concerns.

Past Chair of the ABA Managed Care & Insurance Interest Group and, a Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also has extensive health care reimbursement and insurance experience advising and defending health plans, health care providers, payers, and others about Medicare, Medicaid, Medicare and Medicaid Advantage, Tri-Care, self-insured group, association, individual and group and other health benefit programs and coverages including but not limited to advising public and private payers about coverage and program design and documentation, advising and defending providers, payers and systems and billing services entities about systems and process design, audits, and other processes; provider credentialing, and contracting; providers and payer billing, reimbursement, claims audits, denials and appeals, coverage coordination, reporting, direct contracting, False Claims Act, Medicare & Medicaid, ERISA, state Prompt Pay, out-of-network and other “nonpar,” insured, and other health care claims, prepayment, post-payment and other coverage, claims denials, appeals, billing and fraud investigations and actions and other reimbursement and payment related investigation, enforcement, litigation and actions.

A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, privacy and data security, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns.

A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other related concerns by her service in the leadership of the Solutions Law Press, Inc. Coalition for Responsible Health Policy, its PROJECT COPE: Coalition on Patient Empowerment, and a broad range of other professional and civic organizations including North Texas Healthcare Compliance Association, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children (now Warren Center For Children); current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, past Representative and chair of various committees of ABA Joint Committee on Employee Benefits; an ABA Health Law Coordinating Council representative, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.

Ms. Stamer also is a highly popular lecturer, symposium and chair, faculty member and author, who publishes and speaks extensively on health and managed care industry, human resources, employment and other privacy, data security and other technology, regulatory and operational risk management. Examples of her many highly regarded publications on these matters include “Protecting & Using Patient Data In Disease Management: Opportunities, Liabilities And Prescriptions,” “Privacy Invasions of Medical Care-An Emerging Perspective,” “Cybercrime and Identity Theft: Health Information Security: Beyond HIPAA,” as well as thousands of other publications, programs and workshops these and other concerns for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, Insurance Thought Leadership and many other prominent publications and speaks and conducts training for a broad range of professional organizations.

For more information about Ms. Stamer or her health industry and other experience and involvements, see here or contact Ms. Stamer via telephone at (469) 767-8872 or via e-mail here.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources here.

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating your profile here.

©2017 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press, Inc.™ All other rights reserved. For information about republication or other use, please contact Ms. Stamer here.

 


Tell Congress Pass AHCA Today

May 4, 2017

The US House of Representatives is scheduled to vote again tonight on the revised Majority-leadership lead first step healthcare reform legislation seeking to provide Americans and American business with some initial relief from the soaring premium and health care costs, care access barriers and regulatory and other burdens that have resulted under the ObamaCare law and regulations. Every American should call, e-mail or fax the leaders and their Congressperson as soon as possible today and tell them to pass this legislation and get busy passing the next set of reforms with no further delay, the get and stay II formed and involved until it gets it done starting with the House hearing and vote slated tonight starting at 8:30 Eastern. Get details here.

Health care and its reform is a complex challenge. Americans and American businesses, health payers, and States and their healthcare needs are highly diverse. The ambitious but far from successful Obamacare law shows the dangers of well-meaning but unrealistic To try to fix these challenges with a sweeping, one shot fix.  

While passage of this legislative package won’t magically fix these challenges, it will provide quick relief for some of the ObamaCare expense and restrictions and expand the choices that Americans, American business, payers, providers and States while Congress works with American to identify and pursue legislative, regulatory, marketplace and other improvements. 

Let’s get things going in the right direction!


ACA-ERISA Lawsuit Risks Likely To Continue Until Congress Acts Despite Trump Executive Order For Agencies To Issue Relief

January 23, 2017

Employer and other health plan sponsors, fiduciaries and insurers generally should be prepared to prove that they are maintaining and administering their health plans to comply with many Patient Protection and Affordable Care Act (ACA) mandates pending Congressional repeal or reform of the ACA, despite President Trump’s January 20, 2017 Executive Order on “Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal” (Executive Order) because the Federal agencies responsible for the implementation and interpretation of the ACA generally don’t have authority to bar health plan participants and beneficiaries from bringing benefit denial or breach of fiduciary duty lawsuits against health plans or fiduciaries for violating ACA mandates incorporated into the Employee Retirement Income Security Act (ERISA).

In addition to affirming President Trump’s commitment to seek the prompt repeal of the ACA, the Executive Order seeks to mitigate the burden of the ACA pending Congressional repeal by ordering  the Departments Health and Human Services (HHS), Labor (DOL), Treasury (Treasury)  and other agencies with ACA authority (Agencies) to exercise all available authority and discretion to the “maximum extent permitted by law:”

  • To waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the ACA that would impose a “cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.”
  • To provide greater flexibility to States and cooperate with them in implementing healthcare programs and to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State;
  • For departments and agencies with responsibilities relating to healthcare or health insurance to encourage the development of a free and open market in interstate commerce for the offering of healthcare services and health insurance, with the goal of achieving and preserving maximum options for patients and consumers.

While applicable Agencies are expected to act as quickly as possible to comply with President Trump’s orders, various statutory and procedural requirements almost certainly will limit both the relief granted and the speed with which the Agencies can grant the relief.  One obvious place where statutory limitations on Agencies authority almost certainly will impact the availability of relief arises from the ACA’s incorporation of many of its patient protection act group mandates into ERISA. While the Agencies may possess the authority to lessen the burden of compliance with the regulatory mandates of the ACA by revising regulations, issuing enforcement relief or other certain other actions, these powers do not extend to blocking the authority of participants and beneficiaries to bring suit to enforce the provision of the ACA that the ACA added to ERISA through private benefit denial or breach of fiduciary duty lawsuits brought under ERISA.

In the case of insured health plans, sponsors, insurers and administrators also will need to consider whether their ability to take advantage of the federal relieve available is blocked or restricted by state insurance statutes, regulations or other administrative requirements.  The likelihood of state statutory or regulatory restrictions on insured arrangements is particularly likely because of the heavy regulation of these products by states including the widespread incorporation of ACA mandates into state insurance laws and regulations in response to the Market Reform provisions of the ACA.

Even if these federal requirements are met to qualify for, adopt and implement any federally issued regulatory relief, employer and other plan sponsors, insurers, fiduciaries and administrators also should plan for and be prepared to run the necessary traps to properly amend their plan document, summary plan description and other plan notifications, administrative services agreements, stop loss or other insurance contracts and other vendor agreements to implement their desired changes.  Beyond knowing what has to be done to adopt and communicate the desired changes, employer and other sponsors and fiduciaries, their consultants, brokers and advisors need to consider the requirements and consequences that the planned changes might have under applicable plan documents and vendor agreements to avoid unanticipated costs or liabilities as well as what actions are needed to ensure that ERISA’s prudence and other fiduciary requirements are met.

Until these and other required actions are completed by the Agencies and the applicable plan sponsors, fiduciaries and other parties, employers and other plan sponsors, their management, their health plans, health plan fiduciaries, administrators and insurers remain legally obligated to continue to comply with the ACA as presently implemented under the existing regulations and judicial and administrative rulings.

Responsible parties should begin preparing to take advantage of the anticipated legislative and regulatory relief both by both carefully monitoring statutory and regulatory health plan developments and positioning themselves to act quickly when relief comes by evaluating their existing heath plan documents, contracts, communications and systems to verify existing compliance and determine requirements for implementing any planned changes, opening up discussion vendors about these possibilities and taking other steps to position themselves to act knowledgeably and efficiently to take advantage of new opportunities if and when they emerge and are warranted.

About The Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney and management consultant, author, public policy advocate and lecturer widely known for work, teachings and publications.

Ms. Stamer works with health industry and other businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce, internal controls and regulatory compliance, change management and other performance and operations management and compliance. She supports her clients both on a real-time, “on demand” basis and with longer term basis to deal with daily performance management and operations, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.

A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other concerns by her service in the leadership of a broad range of other professional and civic organization including her involvement as the Vice Chair of the North Texas Healthcare Compliance Association; Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE: Coalition on Patient Empowerment; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; former Gulf Coast TEGE Council Exempt Organization Coordinator; a founding Board Member and past President of the Alliance for Healthcare Excellence; former board member and Vice President of the Managed Care Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; a member and advisor to the National Physicians’ Council for Healthcare Policy; current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section; Past Chair of the ABA Health Law Section Managed Care & Insurance Section; a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group; immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative and current RPTE Representative to the ABA Health Law Coordinating Council; past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a former member of the Board of Directors, Treasurer, Member and Continuing Education Chair of the Southwest Benefits Association and others.

Ms. Stamer also is a highly popular lecturer, symposia chair and author, who publishes and speaks extensively on health and managed care industry, human resources, employment, employee benefits, compensation, and other regulatory and operational risk management. Examples of her many highly regarded publications on these matters include the “Texas Payday Law” Chapter of Texas Employment Law, as well as thousands of other publications, programs and workshops these and other concerns for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications. For additional information about Ms. Stamer, see CynthiaStamer.com   or contact Ms. Stamer via email here  or via telephone to (469) 767-8872.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources at SolutionsLawPress.com such as:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please provide your current contact information and preferences including your preferred e-mail by creating or updating your profile here.

NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission.  The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues.  Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein

©2017 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press, Inc.™  All other rights reserved.


Employers, Plans, Don’t Jump The Gun On ACA Relief

January 23, 2017

Trump Executive Order Promises But Gives No ACA Health Plan Relief Until Agencies Act

Employer and other health plan sponsors, insurers, plan members and their family, health care providers and others struggling to cope with the costs and burdens of complying with the Patient Protection and Affordable Care Act (ACA) health care reforms are celebrating the promise of impending relief from ACA mandates held out by newly inagurated President Donald Trump January 20, 2017 Executive Order on “Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal” (Executive Order).

In addition to affirming President Trump’s commitment to seek the prompt repeal of the ACA, the Executive Order seeks to mitigate the burden of the ACA pending Congressional repeal by ordering  the Departments Health and Human Services (HHS), Labor (DOL), Treasury (Treasury)  and other agencies with ACA authority (Agencies) to exercise all available authority and discretion to the “maximum extent permitted by law”:

  • To waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the ACA that would impose a “cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.”
  • To provide greater flexibility to States and cooperate with them in implementing healthcare programs and to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State;
  • For departments and agencies with responsibilities relating to healthcare or health insurance to encourage the development of a free and open market in interstate commerce for the offering of healthcare services and health insurance, with the goal of achieving and preserving maximum options for patients and consumers.

While employer and other health plan sponsors and others struggling to cope with the costs and mandates of ACA unquestionably welcome the promise of relief offered by the Executive Order, it is critical that those looking forward to enjoying this promised relief not jump the gun or overestimate the scope of the relief.  Because the Executive Order is not self-executing, the Executive Order provides no legally enforceable relief from applicable ACA compliance obligations unless and until the applicable Agency or Congress adopts that relief consistent with law.  While applicable Agencies are expected to act as quickly as possible to comply with President Trump’s orders, various statutory and procedural requirements almost certainly will limit both the relief granted and the speed with which the Agencies can grant the relief.

First, because the Executive Order is not self-executing, it doesn’t actually provide any relief for anyone; rather it just creates the expectation that the Agencies will grant some relief in the future. Those anticipating relief should expect that even regulatory relief will take time since the Agencies by law as well as the terms of the Executive Order will be required to comply with the often time consuming and cumbersome requirements of the Administrative Procedure Act and other applicable statutes in considering and issuing regulatory revisions and relief, including any applicable requirements for submission and approval by the Office of Management and Budget. The often added need for interagency collaboration and negotiation created by the ACA’s grant of multijurisdictional authority over many of its provisions historically has made negotiating these requirements more complicated and time consuming. 

Second, relief will not be available for certain exposures because statutory limits on the jurisdiction and authority of the Agencies under the ACA  will limit the scope of the relief that an Agency can grant.  The Agencies generally do not have the authority to waive certain provisions of the ACA which are not within the discretion of the Agencies, such as the right of participants and beneficiaries in employer or union-sponsored health plan to sue to enforce ACA health plan mandates through a benefits or breach of fiduciary action brought under the Employee Retirement Income Security Act.  Likewise, Agencies also will be restricted in their ability to waive penalties or requirements where the statutory mandate is drafted in a manner that denies the Agency discretionary authority to offer that relief.

Third, health plans, their sponsors, insurers, fiduciaries and administrators should anticipate that they may need to take certain action in response to any issued relief before they can take advantage of the relief allowed such as adopting health plan amendments, issuing notices to participants or beneficiaries, making elections or a combination of these actions.

In the case of insured health plans, sponsors, insurers and administrators also will need to consider whether their ability to take advantage of the federal relieve available is blocked or restricted by state insurance statutes, regulations or other administrative requirements.  The likelihood of state statutory or regulatory restrictions on insured arrangements is particularly likely because of the heavy regulation of these products by states including the widespread incorporation of ACA mandates into state insurance laws and regulations in response to the Market Reform provisions of the ACA.

Even if these federal requirements are met to qualify for, adopt and implement any federally issued regulatory relief, employer and other plan sponsors, insurers, fiduciaries and administrators also should plan for and be prepared to run the necessary traps to properly amend their plan document, summary plan description and other plan notifications, administrative services agreements, stop loss or other insurance contracts and other vendor agreements to implement their desired changes.  Beyond knowing what has to be done to adopt and communicate the desired changes, employer and other sponsors and fiduciaries, their consultants, brokers and advisors need to consider the requirements and consequences that the planned changes might have under applicable plan documents and vendor agreements to avoid unanticipated costs or liabilities as well as what actions are needed to ensure that ERISA’s prudence and other fiduciary requirements are met.

Until these and other required actions are completed by the Agencies and the applicable plan sponsors, fiduciaries and other parties, employers and other plan sponsors, their management, their health plans, health plan fiduciaries, administrators and insurers remain legally obligated to continue to comply with the ACA as presently implemented under the existing regulations and judicial and administrative rulings. While preparing for future changes, health plans, their sponsors, fiduciaries, administrators and insurers also should act to manage their prior and existing liabilities arising out of acts or omissions occurring before Congress or the regulators revise and ease the rules.

While health plans, their sponsors, fiduciaries, administrators and insurers remain legally responsible to comply with existing rules until changed by the regulators or Congress, they still have much to do to get ready for the changes that are coming while acting to manage their health plan costs and liabilities in the meantime. Whether or not the Trump Administration in the future provides relief from Form 8928 self-reporting and excise tax self- assessment penalties for violation of 40 federal group health plans, group health plans and their fiduciaries almost certainly will remain exposed to ERISA lawsuits for violation of ACA or other federal group health plan mandates. In addition, until revoked or revised, employers and health plans remain subject to and risk liability for failing to provide ACA-required tax forms, notices, benefits, coverage, rights or other compliance.

Responsible parties should begin preparing to take advantage of the anticipated legislative and regulatory relief both by both carefully monitoring statutory and regulatory health plan developments and positioning themselves to act quickly when relief comes by evaluating their existing heath plan documents, contracts, communications and systems to verify existing compliance and determine requirements for implementing any planned changes, opening up discussion vendors about these possibilities and taking other steps to position themselves to act knowledgeably and efficiently to take advantage of new opportunities if and when they emerge and are warranted.

About The Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: Erisa & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney and management consultant, author, public policy advocate and lecturer widely known for work, teachings and publications.

Ms. Stamer works with health industry and other businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce, internal controls and regulatory compliance, change management and other performance and operations management and compliance. She supports her clients both on a real-time, “on demand” basis and with longer term basis to deal with daily performance management and operations, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.

A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares her thought leadership, experience and advocacy on these and other concerns by her service in the leadership of a broad range of other professional and civic organization including her involvement as the Vice Chair of the North Texas Healthcare Compliance Association; Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE: Coalition on Patient Empowerment; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; former Gulf Coast TEGE Council Exempt Organization Coordinator; a founding Board Member and past President of the Alliance for Healthcare Excellence; former board member and Vice President of the Managed Care Association; past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; a member and advisor to the National Physicians’ Council for Healthcare Policy; current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee; current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section; Past Chair of the ABA Health Law Section Managed Care & Insurance Section; a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group; immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative and current RPTE Representative to the ABA Health Law Coordinating Council; past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a former member of the Board of Directors, Treasurer, Member and Continuing Education Chair of the Southwest Benefits Association and others.

Ms. Stamer also is a highly popular lecturer, symposia chair and author, who publishes and speaks extensively on health and managed care industry, human resources, employment, employee benefits, compensation, and other regulatory and operational risk management. Examples of her many highly regarded publications on these matters include the “Texas Payday Law” Chapter of Texas Employment Law, as well as thousands of other publications, programs and workshops these and other concerns for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clients on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications. For additional information about Ms. Stamer, see CynthiaStamer.com   or contact Ms. Stamer via email here  or via telephone to (469) 767-8872.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources at SolutionsLawPress.com such as:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please provide your current contact information and preferences including your preferred e-mail by creating or updating your profile here.

NOTICE: These statements and materials are for general informational and purposes only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. Readers are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance at any particular time. No comment or statement in this publication is to be construed as an admission.  The author reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues.  Because the law is rapidly evolving and rapidly evolving rules makes it highly likely that subsequent developments could impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Readers may not rely upon, are solely responsible for, and assume the risk and all liabilities resulting from their use of this publication.

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein

©2017 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press, Inc.™  All other rights reserved.


Brace For Health Plan OCR HIPAA Audits

March 22, 2016

healthinsurance 10

Employer and union sponsored health plans, their sponsors, fiduciaries, and business associates should brace for audits and enforcement of the Privacy, Security, and Breach Notification rules by the Department of Health & Human Service Office of Civil Rights (OCR) follow OCR’s 2016 audit program on the heels of its announcement last week of two large HIPAA settlements last week.

OCR confirmed today it is sending emails notifying health plans, healthcare providers, healthcare clearing houses (Covered Entities) and their business associates identified as part of the kickoff of its next phase of audits of Covered Entities.  In light of the  HIPAA verification rules  and the notorious spread of opportunistic identity theft and other fraud by opportunistic Cybercriminals following these types of announcements, Covered Entities and business associates should carefully verify the requests validity and manage the response to avoid violating HIPAA in responding and position for defensibility against potential penalties.

Even if health plans or other Covered Entities reviewed their practices in the last 12-months, most will want to update this review in response to new OCR guidance and enforcement actions, including new guidance on obligations to provide plan members or other subjects of protected health information with access to or copies of their records and other guidance, as well as the ever-expanding list of enforcement actions by OCR.

To catch up on this latest guidance, Solutions Law Press, Inc. ™ invites you to register to participate in a special WebEx briefing on “HIPAA Update: The Latest On Security, Patient Access & Other HIPAA Developments” on Wednesday, March 30, 2016 beginning at Noon Central Time on Wednesday, March 30, 2016.

2016 Audit Program 

In its 2016 Phase 2 HIPAA Audit Program, OCR will review the policies and procedures adopted and employed by Covered Entities  and their business associates to meet selected standards and implementation specifications of the Privacy, Security, and Breach Notification Rules. OCR says it will primarily conduct these audits as desk audits, although some on-site audits will be conducted.

According to today’s announcement, the 2016 audit process begins with verification of an entity’s address and contact information. OCR is sending emails to Covered Entities and business associates requesting that contact information be provided to OCR on time. OCR will then send a pre-audit questionnaire to gather data about the size, type, and operations of potential audit targets.  OCR says this data will be used with other information to create potential audit subject pools.  Recipients should contact qualified legal counsel immediately for advice and assistance about proper procedures to verify the email is in fact from OCR and for assistance in responding.

If an entity does not respond to OCR’s request to verify its contact information or pre-audit questionnaire, OCR will use publicly available information about the entity to create its audit subject pool. Therefore an entity that does not respond to OCR may still be selected for an audit or subject to a compliance review. Communications from OCR will be sent via email and may be incorrectly classified as spam. If your entity’s spam filtering and virus protection are automatically enabled, OCR expects entities to check their junk or spam email folder for emails from OCR.

The announcement also reflects that OCR is still developing other aspects of the audit program. OCR will post updated audit protocols on its website closer to conducting the 2016 audits. The audit protocol will be updated to reflect the HIPAA Omnibus Rulemaking and can be used as a tool by organizations to conduct their own internal self-audits as part of their HIPAA compliance activities.

OCR says its audits will enhance industry awareness of compliance obligations and enable OCR to better target technical assistance regarding problems identified through the audits. Through the information gleaned from the audits, OCR will develop tools and guidance to aid the industry in compliance self-evaluation and in preventing breaches. OCR plans to use results and procedures used in the phase 2 audits to develop its permanent HIPAA audit program.

OCR Settlements Show Enforcement Risk

The audit program announcement comes less than a week after OCR announced millions of dollars of new penalties under settlements with two Covered Entities:

  • A $1,555,000 settlement with North Memorial Health Care of Minnesota;
  • A $3.9 million settlement with Feinstein Institute for Medical Research.

The two settlements drive home again the substantial liability that health care providers, health plans, health care clearinghouses and their business associates risk for violating HIPAA.

Feinstein Settlement

Feinstein is a biomedical research institute organized as a New York not-for-profit corporation sponsored by Northwell Health, Inc., formerly known as North Shore Long Island Jewish Health System, a large health system headquartered in Manhasset, New York comprised of 21 hospitals and over 450 patient facilities and physician practices.

OCR’s investigation began after Feinstein filed a breach report indicating that on September 2, 2012, a laptop computer containing the electronic protected health information (ePHI) of approximately 13,000 patients and research participants was stolen from an employee’s car. The ePHI stored in the laptop included the names of research participants, dates of birth, addresses, social security numbers, diagnoses, laboratory results, medications, and medical information about potential participation in a research study.

OCR’s investigation discovered that Feinstein’s security management process was limited in scope, incomplete, and insufficient to address potential risks and vulnerabilities to the confidentiality, integrity, and availability of ePHI held by the entity. Further, Feinstein lacked policies and procedures for authorizing access to ePHI by its workforce members, failed to implement safeguards to restrict access to unauthorized users, and lacked policies and procedures to govern the receipt and removal of laptops that contained ePHI into and out of its facilities. For electronic equipment procured outside of Feinstein’s standard acquisition process, Feinstein failed to implement proper mechanisms for safeguarding ePHI as required by the Security Rule.

“Research institutions subject to HIPAA must be held to the same compliance standards as all other HIPAA-covered entities,” said OCR Director Jocelyn Samuels. “For individuals to trust in the research process and for patients to trust in those institutions, they must have some assurance that their information is kept private and secure.”

The resolution agreement and corrective action plan may be found on the OCR website at http://www.hhs.gov/hipaa/for-professionals/compliance-enforcement/agreements/Feinstein/index.html.

North Memorial

The Feinstein settlement announcement follows yesterday’s announcement of a $1.5 million plus settlement with North Memorial to resolve HIPAA charges that it failed to implement a business associate agreement with a major contractor and failed to institute an organization-wide risk analysis to address the risks and vulnerabilities to its patient information. North Memorial is a comprehensive, not-for-profit health care system in Minnesota that serves the Twin Cities and surrounding communities.

The settlement highlights the importance for healthcare providers, health plans, healthcare clearinghouses and their business associates to comply with HIPAA’s business associate agreement and other HIPAA organizational, risk assessment, privacy and security, and other requirements.

OCR’s announcement emphasizes the importance of meeting these requirements. “Two major cornerstones of the HIPAA Rules were overlooked by this entity,” said Director Samuels. “Organizations must have in place compliant business associate agreements as well as an accurate and thorough risk analysis that addresses their enterprise-wide IT infrastructure.”

The settlement comes from charges filed after OCR initiated its investigation of North Memorial following receipt of a breach report on September 27, 2011, which indicated that an unencrypted, password-protected laptop was stolen from a business associate’s workforce member’s locked vehicle, impacting the ePHI of 9,497 individuals.

OCR’s investigation indicated that North Memorial failed to have in place a business associate agreement, as required under the HIPAA Privacy and Security Rules, so that its business associate could perform certain payment and health care operations activities on its behalf. North Memorial gave its business associate, Accretive, access to North Memorial’s hospital database, which stored the ePHI of 289,904 patients. Accretive also received access to non-electronic protected health information as it performed services on-site at North Memorial.

The investigation further determined that North Memorial failed to complete a risk analysis to address all of the potential risks and vulnerabilities to the ePHI that it maintained, accessed, or transmitted across its entire IT infrastructure — including but not limited to all applications, software, databases, servers, workstations, mobile devices and electronic media, network administration and security devices, and associated business processes.

In addition to the $1,550,000 payment, North Memorial is required to develop an organization-wide risk analysis and risk management plan, as required under the Security Rule. North Memorial will also train appropriate workforce members on all policies and procedures newly developed or revised pursuant to this corrective action plan.

The Resolution Agreement and Corrective Action Plan can be found on the HHS website at: http://www.hhs.gov/hipaa/for-professionals/compliance-enforcement/agreements/north-memorial-health-care/index.html.
Settlement Latest Reminder To Manage HIPAA Risks.

Following up on OCR’s imposition of its second-ever HIPAA Civil Monetary Penalty (CMP) and the latest in an ever-growing list of settlements by Covered Entities under HIPAA, these latest  settlements illustrate the substantial liability that Covered Entities face for violating HIPAA. To avoid these liabilities, Covered Entities must constantly be diligent to comply with the latest guidance of OCR about their obligations under HIPAA.

As OCR continues to issue additional guidance as well as supplement this guidance through information shared in settlement agreements like the North Memorial settlement, even if Covered Entities reviewed their practices in the last 12-months, most will want to update this review in response to new OCR guidance and enforcement actions, including new guidance on obligations to provide plan members or other subjects of protected health information with access to or copies of their records and other guidance, as well as the ever-expanding list of enforcement actions by OCR.

Since the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH) amended HIPAA, Covered Entities face growing responsibilities and liability for maintaining the security of ePHI.

In response to HITECH, OCR continues to use a carrot and stick approach to encouraging and enforcing compliance. As demonstrated by OCR’s imposition of the second-ever HIPAA Civil Monetary Penalty (CMP) of $239,000 against Lincare and the ever-growing list of Resolution Agreements OCR announces with other Covered Entities, OCR continues to step up enforcement against Covered Entities that breach the Privacy and Security Rules. See OCR’s 2nd-Ever HIPAA CMP Nails Lincare For $239,000.

On the other hand, OCR also continues to encourage voluntary compliance by Covered Entities by sharing guidance and tools to aid Covered Entities to understand fulfill their HIPAA responsibilities such as the HIPAA Security Rule Crosswalk to NIST Cybersecurity Framework (Crosswalk) unveiled by OCR on February 24, 2016.The crosswalk that maps the HIPAA Security Rule to the standards of the National Institute of Standards and Technology (NIST) Framework for Improving Critical Infrastructure Cybersecurity (the Cybersecurity Framework) as well as mappings to certain other commonly used security frameworks.

While stating that the HIPAA Security Rule does not require use of the NIST Cybersecurity Framework, OCR says it hopes the Crosswalk will provide “a helpful roadmap” for HIPAA Covered Entities and their business associates to understand the overlap between the NIST Cybersecurity Framework, the HIPAA Security Rule, and other security frameworks that can help Covered Entities safeguard health data in a time of increasing risks and help them to identify potential gaps in their programs.

At the same time, OCR’s announcement of its release of the Crosswalk also cautions users that “use of the Framework does not guarantee HIPAA compliance.” Rather, OCR says “the crosswalk provides an informative tool for entities to use to help them more comprehensively manage security risks in their environments.

With a USA Today report attributing more than 40 percent of data breaches to the healthcare industry over the last three years 91 percent of all health organizations having reporting breaches over the last two years, OCR has made clear that it intends to zealously investigate and enforce the Security Rules against Covered Entities that violate the Security Rules against Covered Entities that fail to take suitable steps to safeguard the security of PHI as required by the HIPAA Security Rule.

To meet these requirements, the HIPAA Security Rule requires that Covered Entities conduct and be prepared to product documentation of their audit and other efforts to comply with the Security Rule Most Covered Entities will want to consider including an assessment of the adequacy of their existing practices under the Crosswalk and other requirements disclosed by OCR in these assessments to help position the Covered Entity to defend or mitigate HIPAA CMP and other liabilities in the event of a HIPAA breech or audit.

Changing Rules Complicate Compliance

In addition to maintaining adequate security, HIPAA also requires Covered Entities to provide individuals with the right to access and receive a copy of their health information from their providers, hospitals, and health insurance plans in accordance with the HIPAA Privacy Rule. In response to recurrent difficulties experienced by individuals in exercising these rights, OCR recently published supplemental guidance to clarify and promote better understanding and compliance with these rules by Covered Entities.   OCR started this process in January, 2015 by releasing a comprehensive fact sheet (Access fact sheet) and the first in a series of topical frequently asked questions (FAQs) addressing patients’ right to access their medical records, which set forth requirements providers must follow in sharing medical records with patients, including that they must do so in a timely manner and in a format that works for the patient.

Earlier this month, OCR followed up by publishing on March 1, 2016 a second set of FAQs addresses additional issues, including the fees individuals may be charged for copies of their health information and the right of individuals to have their health information sent directly to a third party if they so choose.

Covered entities and their business associates should expect OCR to ask about use of these tools in audits and investigations.  Accordingly, they should move quickly to review and update their business associate agreements and other practices to comply with this new guidance as well as watch for further guidance and enforcement about these practices from OCR.

Other Key HIPAA Regulatory & Enforcement Changes Raise Responsibilities & Risks

OCR’s new guidance on access to PHI follows a host of other regulatory and enforcement activities. While the particulars of each of these new actions and guidance vary, all send a very clear message: OCR expects Covered Entities and their business associates to comply with HIPAA and is offering tools and other guidance to aid them in that process. In the event of a breach or audit, Covered Entities and their business associates need to be prepared to demonstrate their efforts to comply.

Those that cannot show adequate compliance efforts should be prepared for potentially substantial CMP or Resolution Agreement payments and other sanctions.

Register For 3/30 Webex Briefing

Solutions Law Press, Inc.™ invites to catch up on the latest guidance on the Covered Entities’ responsibility under HIPAA to provide access to patients to PHI by registering here to participate in the “HIPAA Update: The Latest On Security, Patient Access & Other HIPAA Developments” Webex briefing by attorney Cynthia Marcotte Stamer that Solutions Law Press, Inc.™ will host beginning at Noon Central Time on Wednesday, March 30, 2016.

About The Author

Cynthia Marcotte Stamer is a practicing attorney and management consultant, author, public policy advocate and lecturer widely recognized for her extensive work and pragmatic thought leadership, experience, publications and training on HIPAA and other privacy, medical records and data and other health care and health plan concerns.
Recognized as “LEGAL LEADER™ Texas Top Rated Lawyer” in both Health Care Law and Labor and Employment Law, a “Texas Top Lawyer,” an “AV-Preeminent” and “Top Rated Lawyer” by Martindale-Hubble and as among the “Best Lawyers In Dallas” in employee benefits 2015 by D Magazine; Ms. Stamer has more than 28 years of extensive proven, pragmatic knowledge and experience representing and advising health industry clients and others on operational, regulatory and other compliance, risk management, product and process development, public policy and other key concerns.

As a core component of her work as the Managing Shareholder of Cynthia Marcotte Stamer, PC, the Co-Managing Member of Stamer Chadwick Soefje PLLC, Ms. Stamer has worked extensively throughout her nearly 30 year career with health care providers, health plans, health care clearinghouses, their business associates, employers, banks and other financial institutions, their technology and other vendors and service providers, and others on legal and operational risk management and compliance with HIPAA, FACTA, PCI, trade secret, physician and other medical confidentiality and privacy, federal and state data security and data breach and other information privacy and data security rules and concerns; prevention, investigation, response, mitigation and resolution of known or suspected data or privacy breaches or other incidents; defending investigations or other actions by plaintiffs, OCR, FTC, state attorneys’ general and other federal or state agencies; reporting and redressing known or suspected breaches or other violations; business associate and other contracting; insurance or other liability management and allocation; process and product development, contracting, deployment and defense; evaluation, commenting or seeking modification of regulatory guidance, and other regulatory and public policy advocacy; training and discipline; enforcement, and a host of other related concerns for public and private health care providers, health insurers, health plans, technology and other vendors, employers, and others.

Beyond her extensive involvement advising and defending clients on these matters, Ms. Stamer also has served for several years as the scrivener for the ABA JCEB’s meeting with OCR for many years. She returns as Chair of the Southern California ISSA Health Care Privacy & Security Summit for the third year in 2016, as well as speaks and serves on the steering committee of a multitude of other programs.

A Fellow in the American College of Employee Benefit Counsel, the American Bar Foundation and the Texas Bar Foundation, Ms. Stamer also shares shared her thought leadership, experience and advocacy on HIPAA and other concerns by her service in the leadership of a broad range of other professional and civic organization including her involvement as the Vice Chair of the North Texas Healthcare Compliance Association, Executive Director of the Coalition on Responsible Health Policy and its PROJECT COPE; Coalition on Patient Empowerment, a founding Board Member and past President of the Alliance for Healthcare Excellence, past Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; former Board President of the early childhood development intervention agency, The Richardson Development Center for Children; former Board Compliance Chair and Board member of the National Kidney Foundation of North Texas, current Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, current Vice Chair of Policy for the Life Sciences Committee of the ABA International Section, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a current Defined Contribution Plan Committee Co-Chair, former Group Chair and Co-Chair of the ABA RPTE Section Employee Benefits Group, immediate past RPTE Representative to ABA Joint Committee on Employee Benefits Council Representative and current RPTE Representative to the ABA Health Law Coordinating Counsel, former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division, past Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee, a former member of the Board of Directors of the Southwest Benefits Association and others.

Ms. Stamer also is a highly popular lecturer, symposia chair and author, who publishes and speaks extensively on health and managed care industry, human resources, employment and other privacy, data security and other technology, regulatory and operational risk management. Examples of her many highly regarded publications on these matters include “Protecting & Using Patient Data In Disease Management: Opportunities, Liabilities And Prescriptions,” “Privacy Invasions of Medical Care-An Emerging Perspective,” “Cybercrime and Identity Theft: Health Information Security: Beyond HIPAA,” as well as thousands of other publications, programs and workshops these and other concerns for the American Bar Association, ALI-ABA, American Health Lawyers, Society of Human Resources Professionals, the Southwest Benefits Association, the Society of Employee Benefits Administrators, the American Law Institute, Lexis-Nexis, Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, the HCCA, ISSA, HIMSS, Modern Healthcare, Managed Healthcare, Institute of Internal Auditors, Society of CPAs, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other symposia and publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications and speaks and conducts training for a broad range of professional organizations and for clientson the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications. For additional information about Ms. Stamer, see CynthiaStamer.com or the Stamer│Chadwick │Soefje PLLC or contact Ms. Stamer via email here or via telephone to (469) 767-8872.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press, Inc.™ resources at www.solutionslawpress.com  such as:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating or updating your profile here.  ©2016 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press, Inc.™ All other rights reserved.


HIPAA Settlement Warns Health Plans, Sponsoring Employers & Business Associates To Manage HIPAA Risks

July 11, 2015

Health plans, insurers and other health plan industry service providers widespread use and reliance on internet applications to access and share protected health information when performing online enrollment, claims administration and payment, reporting, member and provider communications and a host of other key health plan functions makes it particularly important for health plans, their employer or other sponsors, fiduciaries, insurers and other vendors and their management to respond quickly to a warning from Department of Health & Human Services (HHS) Office of Civil Rights (OCR) warning to ensure applications and systems properly safeguard protected health information (PHI) as required by the Health Insurance Portability & Accountability (HIPAA) Privacy, Security & Breach Notification Rules (HIPAA Rules) and other laws made in its July 10, 2015 announcement of its latest HIPAA settlement.

The new Resolution Agreement with the Massachusetts based hospital system, St. Elizabeth’s Medical Center (SEMC) settles charges OCR made that SEMC reached HIPAA by failing to protect the security of PHI when using internet applications to access and share PHI. The Resolution Agreement also shows how complaints filed with OCR by workforce members can create additional compliance headaches for Covered Entities or their business associates while the “robust corrective action plan” imposed under the Resolution Agreement shares examples of ladder reporting and management oversight and documentation Covered Entities and business associates can expect to need to prove their organizations maintains the “culture of compliance” with HIPAA OCR expects in the event of an OCR audit or investigation.

With recent reports on massive health plan HIPAA and other data breaches fueling widespread participant and regulatory concern over identity theft and other data security, Covered Entities and their business associates should prepare to defend the adequacy of their own HIPAA and other data security practices in the event of an OCR breach investigation or audit. Accordingly, health plans and their employer or other sponsors, health plan fiduciaries, health plan vendors acting as business associates and others dealing with health plans and their management should contact legal counsel experienced in these matters for advice within the scope of attorney-client privilege about how to respond to the OCR warning and other developments to manage their HIPAA and other privacy and data security legal and operational risks and liabilities.

SEMC Resolution Agreement Overview

The SEMC Resolution Agreement settles OCR charges that SEMC violated HIPAA stemming from an OCR investigation of a November 16, 2012 complaint by SEMC workforce members and a separate data breach report SEMC separately made to OCR of a breach of unsecured electronic PHI (ePHI) stored on a former SEMC workforce member’s personal laptop and USB flash drive affecting 595 individuals. In their complaint, SEMC workers complained SEMC violated HIPAA by allowing workforce members to use an internet-based document sharing application to share and store documents containing electronic protected health information (ePHI) of at least 498 individuals without adequately analyzing the risks. OCR says its investigation of the complaint and breach report revealed among other things that:

  • SEMC improperly disclosed the PHI of at least 1,093 individuals;
  • SEMC failed to implement sufficient security measures regarding the transmission of and storage of ePHI to reduce risks and vulnerabilities to a reasonable and appropriate level; and
  • SEMC failed to timely identify and respond to a known security incident, mitigate the harmful effects of the security incident, and document the security incident and its outcome.

To resolve OCR’s charges, SMCS agreed to pay $218,400 to OCR and implement a “robust corrective action plan” to correct these alleged HIPAA violations. While the required settlement payment is relatively small, the Resolution Agreement’s focus security requirements for internet application and data use and sharing activities engaged in by virtually every Covered Entity and business associate make the Resolution Agreement merit the immediate attention of all Covered Entities, their business associates and their management.

SEMC HIPAA Specific Compliance Lessons For Health Plans & Business Associates

In announcing the Resolution Agreement, OCR Director Jocelyn Samuels sent a clear warning to all Covered Entities and their business associates “to pay particular attention to HIPAA’s requirements when using internet-based document sharing applications,” stating “In order to reduce potential risks and vulnerabilities, all workforce members must follow all policies and procedures, and entities must ensure that incidents are reported and mitigated in a timely manner.”

The Resolution Agreement makes clear that OCR expects health plans and other Covered Entities and their business associates to be able to show both their timely investigation of reported or suspected HIPAA susceptibilities or violations as well as to self-audit and spot test HIPAA compliance in their operations. The SEMC corrective action plan also indicates Covered Entities and business associates must be able to produce documentation and other evidence needed to show the top to bottom dedication to HIPAA compliance necessary to prove a “culture of compliance” with HIPAA permeates their organizations.

In light of OCR’s warning and expectations, Covered Entities and business associates should start by considering the advisability for their own organization to take one or more of the steps outlined in the “robust corrective action plan” included in the Resolution Agreement, starting with the specific steps the corrective action plan requires SEMC to address its internet application security concerns such as:

  • Conducting self-audits and spot checks of workforce members’ familiarity and compliance with HIPAA policies and procedures on transmitting ePHI using unauthorized networks; storing ePHI on unauthorized information systems, including unsecured networks and devices; removal of ePHI from SEMC; prohibition on sharing accounts and passwords for ePHI access or storage; encryption of portable devices that access or store ePHI; security incident reporting related to ePHI; and
  • Inspecting laptops, smartphones, storage media and other portable devices, workstations and other devices containing ePHI and other data devices and systems and their use; and
  • Conducting other tests and audits of security and compliance with policies, processes and procedures; and
  • Documenting results, findings, and corrective actions including appropriate up the ladder reporting and management oversight of these and other HIPAA compliance expectations, training and other efforts.

Broader HIPAA Compliance & Risk Management Lessons

Beyond the specific internet applications and other security of ePHI lessons in the Resolution Agreement, Covered Entities and their business associates also should be mindful of other more subtle, but equally important broader HIPAA compliance and risk management lessons provided in the Resolution Agreement and other recent OCR guidance about their overall HIPAA compliance responsibilities.

One of the most significant of these lessons is the need for proper workforce training, oversight and management. The Resolution Agreement sends an undeniable message that OCR expects Covered Entities, business associates and their leaders to be able to show their effective oversight and management of the operational compliance of their systems and members of their workforce with HIPAA policies. The SEMC corrective action plan should prompt Covered Entities and business associates to weigh the adequacy of their existing workforce training, reporting, investigation and other management processes and documentation. Meanwhile, OCR’s report that an OCR complaint made by SEMC insiders to OCR prompted its investigation also should sensitize Covered Entities and their business associates of the need to ensure that their workforce training and management processes are appropriate to position their organization both to show their processes encourage proper internal reporting and investigation of compliance concerns, as well as manage the inevitable HIPAA and other human resources retaliation and whistleblower exposures that can arise out of such reports.

The Resolution Agreement also provides insights to the internal corporate processes and documentation of compliance efforts that Covered Entities and business associates may need to show their organization has the required “culture of compliance” needed to mitigate consequences of breaches or other compliance glitches. Particularly notable are Resolution Agreement’s terms on the documentation and up the ladder reporting to management and OCR of SEMC’s self-audit and self-correction activities and management oversight and management of these activities. Like tips shared by HHS in the recently released Practical Guidance for Health Care Governing Boards on Compliance Oversight, these details in the Resolution Agreement provide invaluable tips to Boards and other leaders of Covered Entities and business associates about steps they can take to promote their ability to demonstrate their organizations have the necessary culture of HIPAA compliance OCR expects.

Health Plan HIPAA Compliance Risks & Responsibilities of Employers & Their Leaders

While HIPAA places the primary duty for complying with HIPAA on Covered Entities and business associates, health plan sponsors and their management still need to make HIPAA compliance a priority for many practical and legal reasons.

As employers forced to cope with the deluge of fears and questions of employees and other health plan members impacted by recent massive PHI breach reports shared by Blue Cross association health insurance plan giants, Anthem and Premera can attest, HIPAA data breach or other compliance reports often trigger significant financial, administrative, workforce satisfaction and other operational costs employer health plan sponsors. Inevitable employee concern about health plan data breaches undermines employee value and satisfaction of the health benefit plan as an employee benefit. These concerns also usually require employers to expend significant management and financial resources to respond to these concerns and address other employer fallout from the breach.

The costs of investigation and redress of a known or suspected HIPAA data or other breach typically far exceed the actual damages to participants resulting from the breach. While HIPAA technically does not make sponsoring employers directly responsible for these duties or the costs of their performance, as a practical matter sponsoring employers typically can expect to pay costs and other expenses that its health plan incurs to investigate and redress a HIPAA breach. For one thing, except in the all too rare circumstances where employers as plan sponsors have specifically negotiated more favorable indemnification and liability provisions in their vendor contracts, employer and other health plan sponsors usually agree in their health plan vendor contracts to pay the expenses and to indemnify health plan insurers, third party administrators, and other vendors for costs and liabilities arising from HIPAA breaches or other events arising in the course of the administration of the health plan. Since employers typically are obligated to pay health plan costs in excess of participant contributions, employers also typically would be required to provide the funding their health plan needs to cover these costs even in the absence of such indemnification agreements.

Sponsoring employers and their management also should be aware the employer’s exception from direct liability for HIPAA Rule compliance does not fully insulate the employer or its management from legal risks in the event of a health plan data breach or other HIPAA violation.

While HIPAA generally limits direct responsibility for compliance with the HIPAA Rules to a health plan or other Covered Entity and their business associates, HIPAA hybrid entity and other organizational rules and criminal provisions of HIPAA, as well as various other federal laws arguably could create liability risks for the employer. See, e.g., Cyber Liability, Healthcare: Healthcare Breaches: How to Respond; Restated HIPAA Regulations Require Health Plans to Tighten Privacy Policies and Practices; Cybercrime and Identity Theft: Health Information Security Beyond. For example, hybrid entity and other organizational provisions in the HIPAA Rules generally require employers and their health plan to ensure that health plan operations are appropriately distinguished from other employer operations in order for otherwise non-covered human resources, accounting or other employer activities to avoid subjecting their otherwise non-covered employer operations and data to HIPAA Rules. To achieve this required designation and separation, the HIPAA rules typically also require that the health plan include specific HIPAA language and the employer and health plan take appropriate steps to designate and separate health plan records and data, workforces, and operations from the non-covered business operations and records of the sponsoring employer. Failure to fulfill these requirements could result in the unintended spread of HIPAA restrictions and liabilities to other aspects of the employer’s human resources or other operations. Sponsoring employers will want to confirm that health plan and other operations and workforces are properly designated, distinguished and separated to reduce this risk.

When putting these designations and separations in place, employers also generally will want to make arrangements to ensure that their health plan includes the necessary terms and the employer implements the policies necessary for the employer to provide the certifications to the health plan that HIPAA will require that the health plan receive before HIPAA will allow health plan PHI to disclosed to the employer or its representative for the limited underwriting and other specified plan administration purposes permitted by the HIPAA Rules.

Once these arrangements are in place, employers and their management also generally will want to take steps to minimize the risk that their organization or a member of the employer’s workforce honors these arrangements and does not improperly access or use health plan PHI, systems in violation of these conditions or other HIPAA Rules. This or other wrongful use or access of health plan PHI or systems could violate criminal provisions of HIPAA or other federal laws making it a crime for any person – including the employer or a member of its workforce – from wrongfully accessing health plan PHI, electronic records or systems. Since health plan PHI records also typically include personal tax, social security information that the Internal Revenue Code, the Social Security Act and other federal laws generally would require the employer to keep confidential and to protect against improper use, employers and their management also generally should be concern about potential exposures for their organization that could result from improper use or access of this information in violation of these other federal laws. Since HIPAA and some of these other laws under certain conditions make it a felony crime to violate these rules, employer and their management generally will want to treat compliance with these federal rules as critical elements of the employer’s Federal Sentencing Guideline and other compliance programs.

Beyond the already discussed concerns, employers or members of their management also may have an incentive to promote health plan compliance with HIPAA or other health plan privacy or data security requirements to many the exposure of the employer or management or other staff to statutory, regulatory, contractual or ethical liabilities arising under ERISA, Internal Revenue Code, the Fair & Accurate Credit Transaction Act (FACTA), trade secret, insurance, disability, identity theft, cybersecurity or other federal or state laws.

For instance, health plan sponsors and management involved in health plan decisions, administration or oversight could face personal fiduciary liability risks under ERISA for failing to act prudently to ensure that the health plan compliance with HIPAA and other federal privacy and data security requirements.. ERISA’s broad functional fiduciary definition encompasses both persons and entities appointed as “named” fiduciaries and others who functionally exercise discretion or control over a plan or its administration. Consequently, the sponsoring employer and certain members of its human resources or other executive management team who functionally possess or exercise responsibility or authority over the administration of the employer’s health plan or its data or other assets, the selection or oversight of plan fiduciaries, vendors, or other workforce members its administration, or other key health plan operations risk ERISA fiduciary liability for their own failures to act prudently in carrying out HIPAA compliance or other responsibilities or to take action when they know or should know that another fiduciary is or has breached these duties. This fiduciary status and risk can occur even if the entity or individual does not is not named a named fiduciary, expressly disclaims fiduciary responsibility or does not realize it bears fiduciary status or responsibility. Since fiduciaries generally bear personal liability for their own breaches of fiduciary duty as well as potential co-fiduciary liability for fiduciary breaches committed by others that they knew or prudently should have known, most employers and members of their management will make HIPAA health plan compliance a priority to avoid or minimize these potential ERISA fiduciary exposures.

Furthermore, most employers and their management also will appreciate the desirability of taking reasonable steps to manage potential exposures that the employer or members of its management could face if their health plan or the employer violates the anti-retaliation rules of HIPAA or other laws through the adoption and administration of appropriate human resources, internal investigation and reporting, risk management policies and practices. See Employee & Other Whistleblower Complaints Common Source of HIPAA Privacy & Other Complaints.

Act To Manage HIPAA & Other Related Risks

OCR’s release of the Resolution Agreement on the heels of widespread publicity about massive health plan and other data breaches at Blue Cross health care giants, Anthem and Premera and other U.S. businesses and the potential legal and financial exposures that a HIPAA data breach or other violation could create, health plans and their sponsors, insurers, business associates, and leaders should appreciate the advisability of acting promptly to ensure that their health plans and business associates are taking appropriate steps to comply with the HIPAA Rules and manage other associated risks and liabilities. At minimum, health plans and their business associates should move quickly to conduct a documented assessment of the adequacy of their health plan internet applications and other HIPAA compliance in in light of the Resolution Agreement and other developments. Given the scope and diversity of the legal responsibilities, risks and exposures associated with this analysis, most health plan sponsors, fiduciaries, business associates and their management also will want to consider taking other steps to mitigate various other legal and operational risks that lax protection or use of health plan PHI or systems could create for their health plan, its sponsors, fiduciaries, business associates and their management. Health plan fiduciaries, sponsors and business associates and their leaders also generally will want to explore options to use indemnification agreements, liability insurance or other risk management tools as a stop gap against the costs of investigation or defense of a HIPAA security or other data breach.

For Legal or Consulting Advice, Legal Representation, Training Or More Information

If you need help responding to these new or other workforce, benefits and compensation, performance and risk management, compliance, enforcement or management concerns, help updating or defending your workforce or employee benefit policies or practices, or other related assistance, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

A practicing attorney and Managing Shareholder of Cynthia Marcotte Stamer, P.C., a member of Stamer│Chadwick │Soefje PLLC, Ms. Stamer’s more than 27 years’ of leading edge work as an practicing attorney, author, lecturer and industry and policy thought leader have resulted in her recognition as a “Top” attorney in employee benefits, labor and employment and health care law.

Board certified in labor and employment law by the Texas Board of Legal Specialization, a Fellow in the American College of Employee Benefit Counsel, past Chair and current Welfare Benefit Committee Co-Chair of the American Bar Association (ABA) RPTE Section Employee Benefits Group, Vice Chair of the ABA Tort & Insurance Practice Section Employee Benefits Committee, former Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, an ABA Joint Committee on Employee Benefits Council Representative and Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, Ms. Stamer is recognized nationally and internationally for her practical and creative insights and leadership on HIPAA and other health and other employee benefit, human resources, and related insurance, health care, privacy and data security and tax matters and policy.

Ms. Stamer’s legal and management consulting work throughout her 27 plus year career has focused on helping organizations and their management use the law and process to manage people, process, compliance, operations and risk. Highly valued for her rare ability to find pragmatic client-centric solutions by combining her detailed legal and operational knowledge and experience with her talent for creative problem-solving, Ms. Stamer helps public and private, domestic and international businesses, governments, and other organizations and their leaders manage their employees, vendors and suppliers, and other workforce members, customers and other’ performance, compliance, compensation and benefits, operations, risks and liabilities, as well as to prevent, stabilize and cleanup workforce and other legal and operational crises large and small that arise in the course of operations.

Ms. Stamer works with businesses and their management, employee benefit plans, governments and other organizations deal with all aspects of human resources and workforce management operations and compliance. She supports her clients both on a real time, “on demand” basis and with longer term basis to deal with daily performance management and operations, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy.

Well known for her extensive work with health care, insurance and other highly regulated entities on corporate compliance, internal controls and risk management, her clients range from highly regulated entities like employers, contractors and their employee benefit plans, their sponsors, management, administrators, insurers, fiduciaries and advisors, technology and data service providers, health care, managed care and insurance, financial services, government contractors and government entities, as well as retail, manufacturing, construction, consulting and a host of other domestic and international businesses of all types and sizes.

As a key part of this work, Ms. Stamer uses her deep and highly specialized health, insurance, labor and employment and other knowledge and experience to help employers and other employee benefit plan sponsors; health, pension and other employee benefit plans, their fiduciaries, administrators and service providers, insurers, and others design legally compliant, effective compensation, health and other welfare benefit and insurance, severance, pension and deferred compensation, private exchanges, cafeteria plan and other employee benefit, fringe benefit, salary and hourly compensation, bonus and other incentive compensation and related programs, products and arrangements.

She is particularly recognized for her leading edge work, thought leadership and knowledgeable advice and representation on the design, documentation, administration, regulation and defense of a diverse range of self-insured and insured health and welfare benefit plans including private exchange and other health benefit choices, health care reimbursement and other “defined contribution” limited benefit, 24-hour and other occupational and non-occupational injury and accident, ex-patriate and medical tourism, onsite medical, wellness and other medical plans and insurance benefit programs as well as a diverse range of other qualified and nonqualified retirement and deferred compensation, severance and other employee benefits and compensation, insurance and savings plans, programs, products, services and activities. In these and other engagements, Ms. Stamer works closely with employer and other plan sponsors, insurance and financial services companies, plan fiduciaries, administrators, and vendors and others to design, administer and defend effective legally defensible employee benefits and compensation practices, programs, products and technology. She also continuously helps employers, insurers, administrative and other service providers, their officers, directors and others to manage fiduciary and other risks of sponsorship or involvement with these and other benefit and compensation arrangements and to defend and mitigate liability and other risks from benefit and liability claims including fiduciary, benefit and other claims, audits, and litigation brought by the Labor Department, IRS, HHS, participants and beneficiaries, service providers, and others. She also assists debtors, creditors, bankruptcy trustees and others assess, manage and resolve labor and employment, employee benefits and insurance, payroll and other compensation related concerns arising from reductions in force or other terminations, mergers, acquisitions, bankruptcies and other business transactions including extensive experience with multiple, high-profile large scale bankruptcies resulting in ERISA, tax, corporate and securities and other litigation or enforcement actions.

In the course of this work, Ms. Stamer has accumulated an impressive resume of experience advising and representing clients on HIPAA and other privacy and data security concerns. The scribe for the American Bar Association (ABA) Joint Committee on Employee Benefits annual agency meeting with the Department of Health & Human Services Office of Civil Rights for several years, Ms. Stamer has worked extensively with health plans, health care providers, health care clearinghouses, their business associates, employer and other sponsors, banks and other financial institutions, and others on risk management and compliance with HIPAA and other information privacy and data security rules, investigating and responding to known or suspected breaches, defending investigations or other actions by plaintiffs, OCR and other federal or state agencies, reporting known or suspected violations, business associate and other contracting, commenting or obtaining other clarification of guidance, training and enforcement, and a host of other related concerns. Her clients include public and private health plans, health insurers, health care providers, banking, technology and other vendors, and others. Beyond advising these and other clients on privacy and data security compliance, risk management, investigations and data breach response and remediation, Ms. Stamer also advises and represents clients on OCR and other HHS, Department of Labor, IRS, FTC, DOD and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. She also is the author of numerous highly acclaimed publications, workshops and tools for HIPAA or other compliance including training programs on Privacy & The Pandemic for the Association of State & Territorial Health Plans, as well as HIPAA, FACTA, PCI, medical confidentiality, insurance confidentiality and other privacy and data security compliance and risk management for Los Angeles County Health Department, ISSA, HIMMS, the ABA, SHRM, schools, medical societies, government and private health care and health plan organizations, their business associates, trade associations and others.

Ms. Stamer also is deeply involved in helping to influence the Affordable Care Act and other health care, pension, social security, workforce, insurance and other policies critical to the workforce, benefits, and compensation practices and other key aspects of a broad range of businesses and their operations. She both helps her clients respond to and resolve emerging regulations and laws, government investigations and enforcement actions and helps them shape the rules through dealings with Congress and other legislatures, regulators and government officials domestically and internationally. A former lead consultant to the Government of Bolivia on its Social Security reform law and most recognized for her leadership on U.S. health and pension, wage and hour, tax, education and immigration policy reform, Ms. Stamer works with U.S. and foreign businesses, governments, trade associations, and others on workforce, social security and severance, health care, immigration, privacy and data security, tax, ethics and other laws and regulations. Founder and Executive Director of the Coalition for Responsible Healthcare Policy and its PROJECT COPE: the Coalition on Patient Empowerment and a Fellow in the American Bar Foundation and State Bar of Texas. She also works as a policy advisor and advocate to health plans, their sponsors, administrators, insurers and many other business, professional and civic organizations.

Author of the thousands of publications and workshops these and other employment, employee benefits, health care, insurance, workforce and other management matters, Ms. Stamer also is a highly sought out speaker and industry thought leader known for empowering audiences and readers. Ms. Stamer’s insights on employee benefits, insurance, health care and workforce matters in Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, Modern Healthcare, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications. Ms. Stamer also regularly serves on the faculty and planning committees for symposia of LexisNexis, the American Bar Association, ALIABA, the Society of Employee Benefits Administrators, the American Law Institute, ISSA, HIMMs, and many other prominent educational and training organizations and conducts training and speaks on these and other management, compliance and public policy concerns.

Ms. Stamer also is active in the leadership of a broad range of other professional and civic organizations. For instance, Ms. Stamer presently serves on an American Bar Association (ABA) Joint Committee on Employee Benefits Council representative; Vice President of the North Texas Healthcare Compliance Professionals Association; Immediate Past Chair of the ABA RPTE Employee Benefits & Other Compensation Committee, its current Welfare Benefit Plans Committee Co-Chair, on its Substantive Groups & Committee and its incoming Defined Contribution Plan Committee Chair and Practice Management Vice Chair; Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and a current member of its Healthcare Coordinating Council; current Vice Chair of the ABA TIPS Employee Benefit Committee; the former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division; on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications. She also previously served as a founding Board Member and President of the Alliance for Healthcare Excellence, as a Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; the Board President of the early childhood development intervention agency, The Richardson Development Center for Children; Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a member of the Board of Directors of the Southwest Benefits Association. For additional information about Ms. Stamer, see www.cynthiastamer.com, or http://www.stamerchadwicksoefje.com the member of contact Ms. Stamer via email here or via telephone to (469) 767-8872.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides human resources and employee benefit and other business risk management, legal compliance, management effectiveness and other coaching, tools and other resources, training and education on leadership, governance, human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also may be interested reviewing other Solutions Law Press, Inc.™ resources at www.solutionslawpress.com such as:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating or updating your profile at here.

©2015 Cynthia Marcotte Stamer. Non-exclusive right to republish granted to Solutions Law Press. All other rights reserved.



Tell Congress to protect wellness programs against EEOC attacks

January 28, 2015

The EEOC has declared war on many employer sponsored wellness programs. The Senate Health, Education, Labor, and Pensions Committee will hold a hearing about how to improve employer wellness programs on Thursday, January 29. Employers and others should urge the Committee and other Congressional leaders to overrule the EEOC’s attacks on wellness programs as illegal disability discrimination under the Americans with Disabilities Act.


Stamer Recognized As A “Top” Labor & Employment Lawyer

January 7, 2015

Cynthia Marcotte Stamer is recognized among the “Top Rated” Labor & Employment Lawyers in Texas in the 2014 LexisNexis® Martindale-Hubbell® list of Top Rated Lawyers.  An AV® Preeminent™ (the highest Peer Review Rating available) rated lawyer, Ms. Stamer earned the “Top Rated” Distinction based on confidential Martindale-Hubbell Peer Review Ratings opinions about her skills and experience submitted by other AV® Preeminent™ lawyers and members with professional knowledge of her work.

A noted Texas-based management lawyer and consultant, author, lecturer and policy advocate, Ms. Stamer is nationally and internationally known for her innovative leadership and work helping businesses, governments, and communities manage workforce and other performance and other labor and employment, employee benefits and workforce related representations.

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization,  and a Fellow in the American Bar Association, Texas Bar Association, and the American College of Employee Benefit Counsel,  Ms. Stamer’s legal and management consulting work focuses on helping employers, insurers, employee benefit plans and their administrators, fiduciaries and advisors, community leaders and governments manage people, process and risk.   Throughout her more than 25 year career, Ms. Stamer has helped management deal with all aspects of human resources and workforce management, including employment and outsourcing contracting and performance management, reengineering and other change management, internal controls, compliance and risk management, compensation and employee benefits, communications, worker classification, tax, government relations, enforcement and litigation defense, and other related matters.  Drawing upon her extensive knowledge base of knowledge and wealth of practical skills, Ms. Stamer helps businesses and their leaders manage their employees and other workers and service providers, their performance, compliance, compensation, benefits, risks and liabilities, as well as to prevent, stabilize and cleanup workforce and operations crises large and small that arise in the course of operations.

In addition to her more traditional legal, internal controls and other management consulting work, Ms. Stamer also extensively works with a broad range of business and government clients on health care, pension, social security, workforce, insurance and many other related policy matters critical to their business success and liability management. She both only helps her clients anticipate, monitor and cope with emerging laws, regulations and enforcement and respond to and resolve government investigations and enforcement actions, she also helps them shape the rules through dealings with Congress and other legislatures, regulators and government officials domestically and internationally.  A former lead consultant to the Government of Bolivia on its Social Security reform law and most recognized for her leadership on U.S. health and pension, wage and hour, tax, education and immigration policy reform, Ms. Stamer works with U.S. and foreign businesses, governments, trade associations, and others on workforce, social security and severance, health care, immigration, privacy and data security, tax, ethics and other laws and regulations. Founder and Executive Director of the Coalition for Responsible Healthcare Policy and its PROJECT COPE: the Coalition on Patient Empowerment and a Fellow in the American College of Employee Benefit Counsel, the American Bar Association (ABA) and the State Bar of Texas, Ms. Stamer annually leads the Joint Committee on Employee Benefits (JCEB) HHS Office of Civil Rights agency meeting.  She also works as a policy advisor and advocate to many business, professional and civic organizations.

Author of the thousands of publications and workshops these and other employment, employee benefits, health care, insurance, workforce and other management matters, Ms. Stamer’s insights on employee benefits, insurance, health care and workforce matters in Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders, Employee Benefit News, Texas CEO Magazine, HealthLeaders, Modern Healthcare, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA,HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications. She also regularly serves on the faculty and planning committees for symposia of LexisNexis, the American Bar Association, the Society of Employee Benefits Administrators, the American Law Institute, ISSA, HIMMs, and many other prominent educational and training organizations and conducts training and speaks on these and other management, compliance and public policy concerns.

Beyond these involvements, Ms. Stamer also is active in the leadership of a broad range of other professional and civic organizations. For instance, Ms. Stamer presently serves as Vice President of the North Texas Healthcare Compliance Professionals Association; Immediate Past Chair of the American Bar Association RPTE Employee Benefits & Other Compensation Committee and its current Welfare Benefit Plans Committee Co-Chair, on its Substantive Groups & Committee and its representative to the ABA Joint Committee on Employee Benefits; Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and a current member of its Healthcare Coordinating Council; current Vice Chair of the ABA TIPS Employee Benefit Committee; the former Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division and as a faculty member, editorial advisory board member, speaker and author for numerous human resources, employee benefits, insurance, technology and data security and other professional associations, programs, and publications.  She previously served as a founding Board Member and President of the Alliance for Healthcare Excellence, as a Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; the Board President of the early retirement intervention agency, The Richardson Development Center for Children; Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; a member of the Board of Directors of the Southwest Benefits Association.

You can review other recent human resources, employee benefits and internal controls publications and resources and additional information about the employment, employee benefits and other experience of the Cynthia Marcotte Stamer, PC here.

©2015 Cynthia Marcotte Stamer. Limited, non-exclusive right to republished granted to Solutions Law Press, Inc. All other rights reserved.


IRS Gives Guidance On When Defined Benefit Funding Method Changes Due Actuary Change Automatically Approved

January 6, 2015

The Internal Revenue Service (IRS) today (January 6, 2015) published guidance on when a change in a single-employer defined benefit plan’s funding method due to a change in the plan’s enrolled actuary will qualify for automatic approval.  For additional details, see Announcement 2015-03, which is scheduled for official publication in Internal Revenue Bulletin 2015-3 on January 20, 2015.

For Advice, Training & Other Resources

If you need assistance resolving past Form 5500 or other filing exposures, or monitoring and responding to these and other regulatory policy, enforcement, litigation or other developments, or to review or respond to these or other workforce, benefits and compensation, performance and risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

Board Certified in Labor & Employment Law, Past Chair of the ABA RPTE Employee Benefit & Other Compensation Arrangements Group, Co-Chair and Past Chair of the ABA RPTE Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Plans Committee, an ABA Joint Committee On Employee Benefits Council representative, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a Fellow in the American College of Employee Benefit Counsel, ABA, and State Bar of Texas, Ms. Stamer has more than 25 years’ experience advising health plan and employee benefit, insurance, financial services, employer and health industry clients about these and other matters. Ms. Stamer has extensive experience advising and assisting health plans and insurers about ACA, and a wide range of other plan design, administration, data security and privacy and other compliance risk management policies.  Ms. Stamer also regularly represents clients and works with Congress and state legislatures, EBSA, IRS, EEOC, OCR and other HHS agencies, state insurance and other regulators, and others.   She also publishes and speaks extensively on health and other employee benefit plan and insurance, staffing and human resources, compensation and benefits, technology, public policy, privacy, regulatory and public policy and other operations and risk management concerns. Her publications and insights appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications.

You can review other recent human resources, employee benefits and internal controls publications and resources and additional information about the employment, employee benefits and other experience of the Cynthia Marcotte Stamer, PC here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile www.cynthiastamer.com or by registering to participate in the distribution of these and other updates on our HR & Employee Benefits Update distributions here including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating or updating your profile here. For important information about this communication click here

NOTE:  This article is provided for educational purposes.  It is does not establish any attorney-client relationship nor provide or serve as a substitute for legal advice to any individual or organization.  Readers must engage properly qualified legal counsel to secure legal advice about the rules discussed in light of specific circumstances.

The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations.  The Regulations now require that either we (1) include the following disclaimer in most written Federal tax correspondence or (2) undertake significant due diligence that we have not performed (but can perform on request).

ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, or (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2014 Cynthia Marcotte Stamer. Limited, non-exclusive right to republished granted to Solutions Law Press, Inc. All other rights reserved.




Out-Of-Date, Unpatched Software Triggers HIPAA Security Sanction

December 11, 2014

Health plans, health care providers ealth care clearinghouses (covered entities) and their business associates need to watch for and protect protected health information (PHI) against security exposures from unpatched or unsupported software and other weaknesses in their data security protections as part of their compliance obligations under the Security Rules of the Health Insurance Portability & Accountability Act (HIPAA).

The need to monitor and address data security threats associated with unpatched or unsupported software is demonstrated by the December 9, 2014 announcement by the U.S. Department of Health & Human Services (HHS) Office of Civil Rights (OCR) that Anchorage Community Mental Health Services (ACMHS) will pay $150,000 and adopt a corrective action plan to correct deficiencies in its HIPAA compliance program resulting from unpatched and unsupported software.

OCR opened an investigation against the five-facility, nonprofit provider of behavioral health care services to children, adults, and families in Anchorage, Alaska after receiving notification from ACMHS of a breach of unsecured electronic protected health information (ePHI) affecting 2,743 individuals due to malware compromising the security of its information technology resources.

According to the OCR announcement of the ACMHS Resolution Agreement with OCR, OCR’s investigation revealed that ACMHS had adopted sample Security Rule policies and procedures in 2005, but failed to follow these procedures. Moreover, OCR found that the reported security incident directly resulted of ACMHS failing to identify and address basic risks, such as not regularly updating their IT resources with available patches and running outdated, unsupported software.

“Successful HIPAA compliance requires a common sense approach to assessing and addressing the risks to ePHI on a regular basis,” said OCR Director Jocelyn Samuels. “This includes reviewing systems for unpatched vulnerabilities and unsupported software that can leave patient information susceptible to malware and other risks.”

In an effort to promote awareness of the need to assess and monitor the security of ePHI by covered entities and business associates, OCR continues to encourage covered entities and business associates to conduct regular documented evaluations of the adequacy of their ePHI safeguards and systems. To aid in this process, OCR and the Office of the National Coordinator for Health Information Technology have created a Security Rule Risk Assessment Tool available here to assist organizations that handle PHI in conducting a regular review of the administrative, physical and technical safeguards they have in place to protect the security of the information. Since OCR points to the Tool as a resource, covered entities and business associates should anticipate that their failure to identify and address any deficiencies in the areas identified by the tools as a potentially serious compliance issue. As a result, covered entities and business associates likely will want to take steps to ensure that their records include documented review of the adequacy of the security safeguards identified in the Tool. At the same time, covered entities and their business associates should not assume that the Tool adequately covers all potential HIPAA Security Rule exposures. OCR has made clear in this and other Resolution Agreements that HIPAA’s Security Rule requires ongoing monitoring and assessment of the adequacy of security in response to changes in software or system, emerging threats and other developments.

For Advice, Training & Other Resources

If you need assistance monitoring these and other regulatory policy, enforcement, litigation or other developments, or to review or respond to these or other workforce, benefits and compensation, performance and risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

Board Certified in Labor & Employment Law, Past Chair of the ABA RPTE Employee Benefit & Other Compensation Arrangements Group, Co-Chair and Past Chair of the ABA RPTE Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Plans Committee, an ABA Joint Committee On Employee Benefits Council representative, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a Fellow in the American College of Employee Benefit Counsel, ABA, and State Bar of Texas, Ms. Stamer has more than 25 years’ experience advising health plan and employee benefit, insurance, financial services, employer and health industry clients about these and other matters. Ms. Stamer has extensive experience advising and assisting health plans and insurers about ACA, and a wide range of other plan design, administration, data security and privacy and other compliance risk management policies.  Ms. Stamer also regularly represents clients and works with Congress and state legislatures, EBSA, IRS, EEOC, OCR and other HHS agencies, state insurance and other regulators, and others.   She also publishes and speaks extensively on health and other employee benefit plan and insurance, staffing and human resources, compensation and benefits, technology, public policy, privacy, regulatory and public policy and other operations and risk management concerns. Her publications and insights appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications.

You can review other recent human resources, employee benefits and internal controls publications and resources and additional information about the employment, employee benefits and other experience of the Cynthia Marcotte Stamer, PC here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile www.cynthiastamer.com or by registering to participate in the distribution of these and other updates on our HR & Employee Benefits Update distributions here including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating or updating your profile here. For important information about this communication click here

NOTE:  This article is provided for educational purposes.  It is does not establish any attorney-client relationship nor provide or serve as a substitute for legal advice to any individual or organization.  Readers must engage properly qualified legal counsel to secure legal advice about the rules discussed in light of specific circumstances.

The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations.  The Regulations now require that either we (1) include the following disclaimer in most written Federal tax correspondence or (2) undertake significant due diligence that we have not performed (but can perform on request).

ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, or (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2014 Cynthia Marcotte Stamer. Limited, non-exclusive right to republished granted to Solutions Law Press, Inc. All other rights reserved.


2015 Tax Standard Mileage Rates Announced

December 10, 2014

Employers should review and update mileage reimbursement policies and rates in light of the 2015 standard mileage rates that the Internal Revenue Service (IRS) just announced will apply for federal tax deduction purposes in 2015.

Employers should review and update mileage reimbursement policies and rates in light of the 2015 standard mileage rates that the Internal Revenue Service (IRS) just announced will apply for federal tax deduction purposes in 2015. Meanwhile, employees and other individuals also will want to review these updated rates for purposes of estimating their expected mileage-related income and deductions for 2015.

Notice 2014-79 scheduled for official publication in Internal Revenue Bulletin 2014-53 on December 29, 2014 sets the optional standard mileage rates for substantiating the amount of deductible expenses for using an automobile for business, moving, medical, or charitable purposes.  For 2015, the standard mileage rates are 57.5 cents for business use of an automobile, 14 cents for use of an automobile as a charitable contribution, and 23 cents for use of an automobile as a medical or moving expense.  s

Notice 2014-79 also provides the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.

When projecting expected income or deductions based on the 2015 number, individuals planning to claim deductions for mileage and employers responsible for reporting income on taxable mileage reimbursements to employees and other service providers should keep in mind that the standard deductible mileage rates for medical travel mileage differ from those for other business purposes. The rules for using the optional standard mileage rates to calculate the amount of a deductible business, moving, medical, or charitable expense are in Rev. Proc. 2010-51

For Advice, Training & Other Resources

If you need assistance monitoring these and other regulatory policy, enforcement, litigation or other developments, or to review or respond to these or other workforce, benefits and compensation, performance and risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

Board Certified in Labor & Employment Law, Past Chair of the ABA RPTE Employee Benefit & Other Compensation Arrangements Group, Co-Chair and Past Chair of the ABA RPTE Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Plans Committee, an ABA Joint Committee On Employee Benefits Council representative, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a Fellow in the American College of Employee Benefit Counsel, ABA, and State Bar of Texas, Ms. Stamer has more than 25 years’ experience advising health plan and employee benefit, insurance, financial services, employer and health industry clients about these and other matters. Ms. Stamer has extensive experience advising and assisting health plans and insurers about ACA, and a wide range of other plan design, administration, data security and privacy and other compliance risk management policies.  Ms. Stamer also regularly represents clients and works with Congress and state legislatures, EBSA, IRS, EEOC, OCR and other HHS agencies, state insurance and other regulators, and others.   She also publishes and speaks extensively on health and other employee benefit plan and insurance, staffing and human resources, compensation and benefits, technology, public policy, privacy, regulatory and public policy and other operations and risk management concerns. Her publications and insights appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications.

You can review other recent human resources, employee benefits and internal controls publications and resources and additional information about the employment, employee benefits and other experience of the Cynthia Marcotte Stamer, PC here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile www.cynthiastamer.com or by registering to participate in the distribution of these and other updates on our HR & Employee Benefits Update distributions here including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating or updating your profile here. For important information about this communication click here

NOTE:  This article is provided for educational purposes.  It is does not establish any attorney-client relationship nor provide or serve as a substitute for legal advice to any individual or organization.  Readers must engage properly qualified legal counsel to secure legal advice about the rules discussed in light of specific circumstances.

The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations.  The Regulations now require that either we (1) include the following disclaimer in most written Federal tax correspondence or (2) undertake significant due diligence that we have not performed (but can perform on request).

ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, or (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2014 Cynthia Marcotte Stamer. Limited, non-exclusive right to republished granted to Solutions Law Press, Inc. All other rights reserved.


12/5 Deadline For Insurers, Certain Self-Insured Health Plans To Submit 2014 Transitional Reinsurance Program Contribution Data

December 3, 2014

Friday, December 5, 2014 is the last day for health insurers and certain self-insured group health plans that are “contributing entities” to submit their required 2014 enrollment counts for the transitional reinsurance program contributions under 45 CFR 153.405(b).

Section 1341 of the Patient Protection & Affordable Care Act (ACA) established the transitional reinsurance program to help stabilize premiums in the individual market by partially offsetting issuers’ risk associated with high-cost enrollees.

The transitional reinsurance program will collect contributions from health insurance issuers and certain self-insured group health plans offering major medical coverage for the 2014, 2015 and 2016 benefit years. Under Final Rules published March 5, 2014, the insurer pays the fee for insured plans but where a group health plan is self-insured, the plan itself pays the fee.

In preparation for the collection of the transition reinsurance program fees, the Department of Health & Human Services (HHS) required that contributing entities, or third party administrators or administrative services-only contractors on their behalf, to complete the reinsurance contributions submission process through the Pay.gov website starting October 24, 2014.  Subsequently, HHS extended the 2014 data submission deadline to submit the 2014 enrollment counts for transitional reinsurance program contributions but to date has not modified the deadline for making the required transition reinsurance program fees.

The reinsurance fee equals the yearly rate times the number of plan participants. The yearly rate is $63 for 2014, $44 for 2015, and to be announced for 2016.

Final Rules published March 5, 2014 provide that self-insured plans that are self-administered plans are exempt from the fees in 2015 and 2016.  Since the guidance about these determinations is impacted by the allocation of fiduciary responsibilities under the plan and its associated vendor contracts, plan sponsors need to verify both whether their existing obligations qualifies as exempt and that any planned changes in their vendor contracts and other associated allocation of duties for its administration will not impact this determination.  Employers and others sponsoring self-insured plans should consult with qualified counsel about whether they fall into this exception under the applicable rules, as well as to confirm that their program meets these and other applicable requirements.

Self-insured group health plan sponsors, fiduciaries and administrators should confirm with qualified legal counsel whether their program is a contributing entity required covered by the program and if so, both include the expected cost of the required payments in their budgets and obtain written confirmation from their third party administrator that the data reporting is completed and all other required steps to calculate, pay required contributions and fulfill reporting and other requirements of the program are completed for their records.

For Advice, Training & Other Resources

If you need assistance monitoring these and other regulatory policy, enforcement, litigation or other developments, or to review or respond to these or other workforce, benefits and compensation, performance and risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

Board Certified in Labor & Employment Law, Past Chair of the ABA RPTE Employee Benefit & Other Compensation Arrangements Group, Co-Chair and Past Chair of the ABA RPTE Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Plans Committee, an ABA Joint Committee On Employee Benefits Council representative, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a Fellow in the American College of Employee Benefit Counsel, ABA, and State Bar of Texas, Ms. Stamer has more than 25 years’ experience advising health plan and employee benefit, insurance, financial services, employer and health industry clients about these and other matters. Ms. Stamer has extensive experience advising and assisting health plans and insurers about ACA, and a wide range of other plan design, administration, data security and privacy and other compliance risk management policies.  Ms. Stamer also regularly represents clients and works with Congress and state legislatures, EBSA, IRS, EEOC, OCR and other HHS agencies, state insurance and other regulators, and others.   She also publishes and speaks extensively on health and other employee benefit plan and insurance, staffing and human resources, compensation and benefits, technology, public policy, privacy, regulatory and public policy and other operations and risk management concerns. Her publications and insights appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications.

You can review other recent human resources, employee benefits and internal controls publications and resources and additional information about the employment, employee benefits and other experience of the Cynthia Marcotte Stamer, PC here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile www.cynthiastamer.com or by registering to participate in the distribution of these and other updates on our HR & Employee Benefits Update distributions here including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating or updating your profile here. For important information about this communication click here

NOTE:  This article is provided for educational purposes.  It is does not establish any attorney-client relationship nor provide or serve as a substitute for legal advice to any individual or organization.  Readers must engage properly qualified legal counsel to secure legal advice about the rules discussed in light of specific circumstances.

The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations.  The Regulations now require that either we (1) include the following disclaimer in most written Federal tax correspondence or (2) undertake significant due diligence that we have not performed (but can perform on request).

ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, or (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2014 Cynthia Marcotte Stamer. Limited, non-exclusive right to republished granted to Solutions Law Press, Inc. All other rights reserved.


Tell Senate To Pass Fix To ACA’s Full-Time Employee Definition

November 17, 2014

Employers and others concerned about the financial, reporting and other burdens of complying with the Patient Protection & Affordable Care Act (ACA) “pay-or-play” employer shared responsibility rules imposed under Internal Revenue Code (Code) § 4980H and other rules should review and consider letting their elected representatives and other Senate leaders know if they support the ACA corrections H.R. 4, the “Jobs For America Act” (Act).  With key leadership appointments completed for both Houses for when the new Congress takes office January 3, 2014, now is a key time for businesses and others to let Senate and other leaders know what businesses see as the key legislative priorities that Congress should enact over the next six months.

Pending in the Senate since the House passed it on September 13, 2014, the Act as passed by the House would modify ACA.  Among other things, the Act would:

  • Raise from 30 to 40 hours per week the number of hours per week that an employee would need to work to count as a “full-time employee” for purposes of Code § 4980H’s employer “pay-or play” shared responsibility rule requirement that employers to provide health care coverage for their full-time employees;
  • Amend the Code to let an employer, for purposes of determining whether such employer is an applicable large employer and thus required to provide health care coverage to its employees under ACA to exclude employees who have coverage under a health care program administered by the Department of Defense (DOD), including TRICARE, or the Department of Veterans Affairs (VA); and
  • Repeal of Medical Device Excise Tax on medical devices.

The Act also provides for enactment of numerous reforms beyond these specifically relevant to health care that Congressional supporters say will reduce burdens on business that cost jobs by undermining the competitiveness of U.S. businesses and workers.

While President Obama has vowed to veto any attempt by Republicans that he perceives would roll back the reforms enacted as part of ACA, many members of Congress have expressed support for tightening the definition of full-time employee for purposes of the employer pay-or-play mandates and certain other reforms.  Following the designation of the members of the House and Senate that will occupy key leadership positions completed last week, committee assignments and other key leadership assignments are clarifying and members of both houses of Congress are now discussing the key legislative priorities and their work schedule for the balance of 2014 and when the new Congress is sworn in on January 3, 2014.  Consequently, business and other leaders supporting the Act’s reforms or other ACA reforms should identify the key  Congressional players on the committees influencing the Act and other legislation and begin communicating with the key leaders and their elected Congressional leaders about this support.

Interested persons can review the Act and monitor its status here.

For Advice, Training & Other Resources

If you need assistance monitoring these and other regulatory policy, enforcement, litigation or other developments, or to review or respond to these or other workforce, benefits and compensation, performance and risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

Board Certified in Labor & Employment Law, Past Chair of the ABA RPTE Employee Benefit & Other Compensation Arrangements Group, Co-Chair and Past Chair of the ABA RPTE Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Plans Committee, an ABA Joint Committee On Employee Benefits Council representative, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a Fellow in the American College of Employee Benefit Counsel, ABA, and State Bar of Texas, Ms. Stamer has more than 25 years’ experience advising health plan and employee benefit, insurance, financial services, employer and health industry clients about these and other matters. Ms. Stamer has extensive experience advising and assisting health plans and insurers about ACA, and a wide range of other plan design, administration, data security and privacy and other compliance risk management policies.  Ms. Stamer also regularly represents clients and works with Congress and state legislatures, EBSA, IRS, EEOC, OCR and other HHS agencies, state insurance and other regulators, and others.   She also publishes and speaks extensively on health and other employee benefit plan and insurance, staffing and human resources, compensation and benefits, technology, public policy, privacy, regulatory and public policy and other operations and risk management concerns. Her publications and insights appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications.

You can review other recent human resources, employee benefits and internal controls publications and resources and additional information about the employment, employee benefits and other experience of the Cynthia Marcotte Stamer, PC here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile www.cynthiastamer.com or by registering to participate in the distribution of these and other updates on our HR & Employee Benefits Update distributions here including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating or updating your profile here. For important information about this communication click here

NOTE:  This article is provided for educational purposes.  It is does not establish any attorney-client relationship nor provide or serve as a substitute for legal advice to any individual or organization.  Readers must engage properly qualified legal counsel to secure legal advice about the rules discussed in light of specific circumstances.

The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations.  The Regulations now require that either we (1) include the following disclaimer in most written Federal tax correspondence or (2) undertake significant due diligence that we have not performed (but can perform on request).

ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, or (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2014 Cynthia Marcotte Stamer. Limited, non-exclusive right to republished granted to Solutions Law Press, Inc. All other rights reserved.


HHS Delays Deadline To Submit ACA Reinsurance Program Enrollment Counts To 12/5

November 17, 2014

The Department of Health & Human Services (HHS) has yielded to requests for an extension of the deadline for contributing entities to submit their 2014 enrollment counts for transitional reinsurance program contributions under 45 CFR 153.405(b) required as part of the required under HHS’ rules implementing the Patient Protection &  Affordable Care Act (ACA) transitional reinsurance program. The extended deadline is now 11:59 p.m. on December 5, 2014. The January 15, 2015 and November 15, 2015 payment deadlines remain the same.

The transitional reinsurance program established as part of ACA imposes a reinsurance fee applies in 2014, 2015, and 2016. Under Final Rules published March 5, 2014, the insurer pays the fee for insured plans but where a group health plan is self-insured, the plan itself pays the fee.   Final Rules published March 5, 2014 provide that self-insured plans that are self-administered plans are exempt from the fees in 2015 and 2016.  Employers and others sponsoring self-insured plans should consult with qualified counsel about whether they fall into this exception under the applicable rules, as well as to confirm that their program meets these and other applicable requirements.

The reinsurance fee equals the yearly rate times the number of plan participants. The yearly rate is $63 for 2014, $44 for 2015, and to be announced for 2016.

The Centers for Medicare and Medicaid Services (CMS) plans to run the first risk adjustment and reinsurance calculation estimates in mid-December, 2014 using data to be collected from insurers and TPAs on the EDGE system.  It is unclear how if at all the extension announced by HHS for reporting will impact the timing of these calculations.

For Advice, Training & Other Resources

If you need assistance monitoring these and other regulatory policy, enforcement, litigation or other developments, or to review or respond to these or other workforce, benefits and compensation, performance and risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

Board Certified in Labor & Employment Law, Past Chair of the ABA RPTE Employee Benefit & Other Compensation Arrangements Group, Co-Chair and Past Chair of the ABA RPTE Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Plans Committee, an ABA Joint Committee On Employee Benefits Council representative, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a Fellow in the American College of Employee Benefit Counsel, ABA, and State Bar of Texas, Ms. Stamer has more than 25 years’ experience advising health plan and employee benefit, insurance, financial services, employer and health industry clients about these and other matters. Ms. Stamer has extensive experience advising and assisting health plans and insurers about ACA, and a wide range of other plan design, administration, data security and privacy and other compliance risk management policies.  Ms. Stamer also regularly represents clients and works with Congress and state legislatures, EBSA, IRS, EEOC, OCR and other HHS agencies, state insurance and other regulators, and others.   She also publishes and speaks extensively on health and other employee benefit plan and insurance, staffing and human resources, compensation and benefits, technology, public policy, privacy, regulatory and public policy and other operations and risk management concerns. Her publications and insights appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications.

You can review other recent human resources, employee benefits and internal controls publications and resources and additional information about the employment, employee benefits and other experience of the Cynthia Marcotte Stamer, PC here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile www.cynthiastamer.com or by registering to participate in the distribution of these and other updates on our HR & Employee Benefits Update distributions here including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating or updating your profile here. For important information about this communication click here

NOTE:  This article is provided for educational purposes.  It is does not establish any attorney-client relationship nor provide or serve as a substitute for legal advice to any individual or organization.  Readers must engage properly qualified legal counsel to secure legal advice about the rules discussed in light of specific circumstances.

The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations.  The Regulations now require that either we (1) include the following disclaimer in most written Federal tax correspondence or (2) undertake significant due diligence that we have not performed (but can perform on request).

ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, or (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2014 Cynthia Marcotte Stamer. Limited, non-exclusive right to republished granted to Solutions Law Press, Inc. All other rights reserved.


Stamer Kicks Off Dallas HR 2015 Monthly Lunch Series With 2015 Federal Legislative, Regulatory & Enforcement Update

November 10, 2014

Human resources and other management leaders are watching Washington to see if the change in Congressional control resulting from the November 4, 2014 mid-term election ushers in a more management friendly federal legal environment. Since President Obama took office, the Democrats aggressive pursuit of health care, minimum wage and other federal pro-labor legislation, regulations and enforcement has increased management responsibilities, costs and liabilities.

Nationally recognized management attorney, public policy advisor and advocate, author and lecturer Cynthia Marcotte Stamer will help human resources and other management leaders prepare for 2015 when she speaks on “2015 Federal Legislative, Regulatory & Enforcement Update: What HR & Benefit Leaders Should Expect & Do Now” at the 2015 Dallas HR monthly luncheon series kickoff meeting on January 13, 2014.

About The Program

While November 4, 2014 Republican election victories gave Republicans a narrow majority in both the House and Senate when the new Congress takes office January 3, 2015, the new Republican Majority may face significant challenges delivering on their promises to move quickly to enact more business-friendly health care, guest worker, tax and other key reforms Republicans say will boost the employment and the economy.

While President Obama and Democrat Congressional leaders say they plan to work with the new majority, President Obama already is threatening to use vetoes, regulations and executive orders to block Republicans from obstructing or rolling back his pro-labor policy and enforcement agenda.   When the new Congress takes office, the narrowness of the Republican Majority in the Senate means Republicans can’t block a Democratic filibuster or override a Presidential veto without recruiting some Democratic support.

As the Democrats and Republicans head into battle again, Board Certified Labor & Employment attorney and public policy advocate Cynthia Marcotte Stamer will help human resources and other management leaders get oriented for the year ahead by sharing her insights and predictions on the legislative, regulatory and enforcement agendas that HR, benefit and other business leaders need to plan for and watch in 2015.  Among other things, Ms. Stamer will:

  • Discuss how management can benefit from monitoring and working to influence potential legislative, regulatory and enforcement developments when planning and administering HR and related workforce policies;
  • Discuss the key workforce and other legislative, regulatory and enforcement priorities and proposals Democrats and Republicans plan to pursue during 2015;
  • Share her insights and predictions about how the narrow Republican majority, Mr. Obama’s lame duck presidency and other factors could impact each Party’s ability to pursue its agenda
  • Share tips management leaders can use to help monitor developments and to help shape legislation, regulation and enforcement through Dallas HR, SHRM and other organizations as well as individually;
  • Learn tips for anticipating and maintaining flexibility to respond to legislative, regulatory and enforcement developments; and
  • More

To register or get more details about the program, DallasHR, or both, see http://www.dallashr.org.

About Ms. Stamer

Board certified labor and employment attorney, public policy leader, author, speaker Cynthia Marcotte Stamer is nationally and internationally recognized and valued for her more than 25 years of work advising and representing employers, insurers, employee benefit plans, their fiduciaries and advisors, business and community leaders and governments about workforce, employee benefits, social security and pension, health and insurance, immigration and other performance and risk management, public policy and related regulatory and public policy, management and other operational concerns.

Throughout her career, Ms. Stamer continuously both has helped businesses and their management to monitor and respond to federal and state legislative, regulatory and enforcement concerns and to anticipate and shape federal, state and other laws, regulations, and enforcement in the United States and internationally.

Well known for her leadership on workforce, health and pension policy through her extensive work with clients as well as through her high profile involvements as the Founder and Executive Director of the Coalition for Responsible Healthcare Policy and its PROJECT COPE: the Coalition on Patient Empowerment, a founding Board member of the Alliance for Health Care Excellence, a Fellow in the American College of Employee Benefit Counsel, the American Bar Association (ABA), and the State Bar of Texas leadership and other involvements with the ABA including her annual service leading the annual agency meeting of Joint Committee on Employee Benefits (JCEB) representatives with the HHS Office of Civil Rights and participation in other JCEB agency meetings, past involvements with legislative affairs for the Texas Association of Business and Dallas HR and others, and many speeches, publications, and other educational outreach efforts, Ms. Stamer has worked closely with Congress and federal and state regulators on the Patient Protection & Affordable Care Act and other health care, pension, immigration, tax and other workforce-related legislative and regulatory reforms for more than 30 years. One of the primary drafters of the Bolivian Social Security reform law and a highly involved leader on U.S. workforce, benefits, immigration and health care policy reform, Ms. Stamer’s experience also includes working with U.S. and foreign government, trade association, private business and other organizations to help reform other countries’ and U.S. workforce, social security and severance, health care, immigration, privacy and data security, tax, ethics and other laws and regulations. Ms. Stamer also contributes her policy, regulatory and other leadership to many professional and civic organizations including as Vice President of the North Texas Healthcare Compliance Professionals Association; Immediate Past Chair of the American Bar Association RPTE Employee Benefits & Other Compensation Committee and its current Welfare Benefit Plans Committee Co-Chair, a Substantive Groups & Committee Member; a member of the leadership council of the ABA Joint Committee on Employee Benefits; Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and a current member of its Healthcare Coordinating Council; the current Vice Chair of the ABA TIPS Employee Benefit Committee, and the past Coordinator of the Gulf Coast TEGE Council TE Division.

The publisher and editor of Solutions Law Press, Inc. who serves on the Editorial Advisory Boards of Employee Benefit News, HR.com, InsuranceThoughtLeadership.com and many other publications, Ms. Stamer also is a prolific and highly respected author and speaker,  National Public Radio, CBS, NBC, and other national and regional news organization, Atlantic Information Services, The Bureau of National Affairs, HealthLeaders, Telemundo, Modern Healthcare, Business Insurance, Employee Benefit News, the Employee Benefits News, World At Work, Benefits Magazine, InsuranceThoughtLeadership.com, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, CEO Magazine, CFO Magazine, CIO Magazine, the Houston Business Journal, and many other prominent news and publications.  She also serves as a planning faculty member and regularly conducts training and speaks on these and other management, compliance and public policy concerns for these and a diverse range of other organizations. For additional information about Ms. Stamer, see www.cynthiastamer.com.

For Added Information and Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

For Help Or More Information

If you need assistance in auditing or assessing, updating or defending your organization’s compliance, risk manage or other  internal controls practices or actions, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469)767-8872.

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 24 years of work helping employers and other management; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; and others design, administer and defend innovative workforce, compensation, employee benefit  and management policies and practices. Her experience includes extensive work helping employers implement, audit, manage and defend union-management relations, wage and hour, discrimination and other labor and employment laws, privacy and data security, internal investigation and discipline and other workforce and internal controls policies, procedures and actions.  The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer works, publishes and speaks extensively on management, reengineering, investigations, human resources and workforce, employee benefits, compensation, internal controls and risk management, federal sentencing guideline and other enforcement resolution actions, and related matters.  She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters.Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see hereor contact Ms. Stamer directly.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources at www.solutionslawpress.com.

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile at here or e-mailing this information here.

©2014 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.


IRS Guidance Raises Concerns For Many Employers Offering “Skinny” & Other Limited Coverage Health Plans

November 4, 2014

Learn More Details By Participating In November 13, 2014 WebEx Briefing

Employers of 100 or more full-time employees that plan currently offering or planning to offer after November 4, 2014 health plans with mandate only or other “skinny” plan designs which do not provide “substantial coverage” for both in-patient hospitalization and physician services should re-evaluate the implications of their proposed plan design as well as existing and planned employee enrollment or other communications about those plans, in light of the new guidance provided by Notice 2014-69 released by the Internal Revenue Service (IRS) today.  Learn all the details about this new guidance and its implication by participating in our November 13 , 2014 briefing.

Plans Must Provide “Substantial Coverage” for Both In-Patient Hospitalization & Physician Services To Provide Minimum Value

Notice 2014-69 makes it official that the Department of Treasury (including the IRS) and Department of Health and Human Services (collectively the Departments)  believe that group health plans that fail to provide substantial coverage for in-patient hospitalization services or for physician services (or for both) (referred to in the Notice as Non-Hospital/Non-Physician Services Plans) do not provide the “minimum value” necessary to fulfill the minimum value requirements of Code §36B and 4080H(b).

The Notice also notifies sponsoring employers about the Departments expectations about notifications and other communications to employees about Non-Hospital/Non-Physician Services Plans) as well as shares details about the Departments plans for implementing their interpretation in planned final regulations by March, 2015.

Standards On Employer Communications About Non-Hospital/Non-Physician Services Plans

The Notice cautions employers about the need to use care in communicating with employees about Non-Hospital/Non-Physician Services Plan.  Among other things, the Notice states that an employer that offers a Non-Hospital/Non-Physician Services Plan (including a Pre-November 4, 2014 Non-Hospital/Non-Physician Services Plan) to an employee must:

  • Not state or imply in any disclosure that the offer of coverage under the Non-Hospital/Non-Physician Services Plan precludes an employee from obtaining a premium tax credit, if otherwise eligible, and
  • Timely correct any prior disclosures that stated or implied that the offer of the Non-Hospital/Non-Physician Services Plan would preclude an otherwise tax-credit-eligible employee from obtaining a premium tax credit.
  • Without such a corrective disclosure, the Notice warns that a statement (for example, in a summary of benefits and coverage) that a Non-Hospital/Non-Physician Services Plan provides minimum value will be considered to imply that the offer of such a plan precludes employees from obtaining a premium tax credit. However, an employer that also offers an employee another plan that is not a Non-Hospital/Non/-Physician Services Plan and that is affordable and provides minimum value (MV) is permitted to advise the employee that the offer of this other plan will or may preclude the employee from obtaining a premium tax credit.

Anticipated Approach In Planned Regulations

Regarding the Departments plans to adopt regulations implementing the interpretation of Code § 36B announced in the Notice, the Notice indicates:

  • HHS intends to promptly propose amending 45 CFR 156.145 to provide that a health plan will not provide minimum value if it excludes substantial coverage for in-patient hospitalization services or physician services (or both).
  • Treasury and the IRS intend to issue proposed regulations that apply these proposed HHS regulations under Code section 36B. Accordingly, under the HHS and Treasury regulations, an employer will not be permitted to use the MV Calculator (or any actuarial certification or valuation) to demonstrate that a Non-Hospital/Non-Physician Services Plan provides minimum value.
  • Treasury and IRS anticipate that the proposed changes to regulations will be finalized in 2015 and will apply to plans other than Pre-November 4, 2014 Non-Hospital/Non-Physician Services Plans on the date they become final rather than being delayed to the end of 2015 or the end of the 2015 plan year. As a result, a Non-Hospital/Non-Physician Services Plan (other than a Pre-November 4, 2014 Non-Hospital/Non-Physician Services Plan) should not be adopted for the 2015 plan year.
  • Solely in the case of an employer that has entered into a binding written commitment to adopt, or has begun enrolling employees in, a Non-Hospital/Non-Physician Services Plan prior to November 4, 2014 based on the employer’s reliance on the results of use of the MV Calculator (a Pre-November 4, 2014 Non-Hospital/Non-Physician Services Plan), however, Notice 2014-69 states the Departments anticipate that final regulations, when issued, will not be applicable for purposes of Code section 4980H with respect to the plan before the end of the plan year (as in effect under the terms of the plan on November 3, 2014) if that plan year begins no later than March 1, 2015.
  • Employers offering Non-Hospital/Non-Physician Services Plans should “exercise caution in relying on the Minimum Value Calculator to demonstrate that these plans provide minimum value for any portion of a taxable year after publication of the planned final regulations.
  • The IRS will not require an employee to treat a Non-Hospital/Non-Physician Services Plan as providing minimum value for purposes of an employee’s eligibility for a premium tax credit under Code section 36B, regardless of whether the plan is a Pre-November 4, 2014 Non-Hospital/Non-Physician Services Plan before final regulations take effect.

Employers & Plans Most Likely To Be Affected

The interpretation of minimum value and planned future regulatory changes announced in Notice 2014-69 primarily will impact large employers subject to the “pay or play” shared responsibility rules of Code § 4980H that offer a health plan providing coverage that meets the “minimum essential coverage” standards of Code § 4980H.

Under Code § 4980H(a),  large employers that fail to offer employee and dependent coverage under a health plan providing “minimum essential coverage” to each full-time employee generally become liable to pay an employer shared responsibility payment of  $165 per month ($2000 per year) (commonly referred to as the “A Penalty”)  for each full-time employee.

In contrast, the penalties (commonly referred to as the “B Penalty”) created under Code § 4980H(b) generally comes into play when a covered large employer offers health plan coverage under a health plan providing minimum essential coverage but the plan either:

  • Does not provide minimum value; or
  • The cost to the employee for coverage exceeds 9.5% of the employee’s family adjusted gross income or an otherwise applicable safe harbor amount allowed under IRS regulations.Register For Briefing To Learn More
  • To learn more about Notice 2014-69 and its implications on employer health plan obligations and Code § 4980H shared responsibility exposures, register to participate in a special Solutions Law WebEx Briefing on the new guidance conducted by Attorney Cynthia Marcotte Stamer on Thursday, November 13, 2014 from Noon to 1:00 p.m. Central Time here.
  • Assuming at least one full-time employee of a covered large employer receives a subsidy for enrolling in health coverage through a health care exchange or “Marketplace” established under ACA, the B Penalty generally is equal to $250 per month ($3000 per year) multiplied by the number of such subsidized employees of the employer.

Learn More By Joining November 13, 2014 Solutions Law Press, Inc. Virtual Briefing Register Now!

To learn more about Notice 2014-69 and its implications on employer health plan obligations and Code § 4980H shared responsibility exposures, register to participate in a special Solutions Law WebEx Briefing on the new guidance conducted by Attorney Cynthia Marcotte Stamer on Thursday, November 13, 2014 from Noon to 1:00 p.m. Central Time here.

During the briefing, Ms. Stamer will:

  • Explain what health benefits, if any, employers must offer employees under current ACA guidance
  • Brief participants on this new guidance and other related guidance
  • Discuss potential implications for employers and their health plans
  • Discuss potential options for employers dealing with these plans and
  • Take questions from virtual audience participants as time permits.

Registration Fee is $35.00 per person   Registration required for each virtual participant. Payment required via website registration in advance of the program.. Payment only accepted via website PayPal. No checks or cash accepted. Participation is limited and available on a first come, first serve basis. Persons not registered at least 24 hours in advance not guaranteed to receive access information or materials prior to commencement of the briefing.

This briefing will be conducted via WebEx over the internet. Participants may have the opportunity to participate via telephone, provided that participants electing to participate may incur added charges for telephone connectivity. Solutions Law Press, Inc. is not responsible for any power or system failures. Solutions Law Press, Inc. also expects to offer the opportunity for individuals unable to participate in the live briefing to listen to a recording of the briefing beginning approximately one week after the program via the Internet by registering, paying the required registration fee and following listening instructions received in response to such registration.

Interested persons can register here now!

About The Speaker

A Fellow in the American College of Employee Benefits Counsel, recognized in International Who’s Who, and Board Certified in Labor & Employment Law, attorney and health benefit consultant Cynthia Marcotte Stamer has  25 years experience advising and representing private and public employers, employer and union plan sponsors, employee benefit plans, associations, their fiduciaries, administrators, and vendors, group health, Medicare and Medicaid Advantage, and other insurers, governmental leaders and others on health and other employee benefit. employment, insurance and related matters. A well-known and prolific author and popular speaker Board Certified in Labor & Employment Law, Ms. Stamer presently serves as Co-Chair of the ABA RPTE Section Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Committee, an ABA Joint Committee on Employee Benefits Representative, an Editorial Advisory Board Member of the Institute of Human Resources (IHR/HR.com), Insurance Thought Leadership,com and Employee Benefit News, and various other publications.  With extensive domestic and international regulatory and public policy experience, Ms. Stamer also has worked extensively domestically and internationally on public policy and regulatory advocacy on health and other employee benefits, human resources, insurance, tax, compliance and other matters and representing clients in dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, as well as state legislatures, attorneys general, insurance and labor departments, and other agencies and regulators. A prolific author and popular speaker, Ms. Stamer regularly authors materials and conducts workshops and professional, management and other training and serves on the faculty and planning committees of a multitude of symposium and other educational programs.  See http://www.CynthiaStamer.com  for more details.

 

A Fellow in the American College of Employee Benefits Counsel, recognized in International Who’s Who, and Board Certified in Labor & Employment Law, attorney and health benefit consultant Cynthia Marcotte Stamer has 25 plus years’ experience advising and representing private and public employers, employer and union plan sponsors, employee benefit plans, associations, their fiduciaries, administrators, and vendors, group health, Medicare and Medicaid Advantage, and other insurers, governmental leaders and others on health and other employee benefit. employment, insurance and related matters. A well-known and prolific author and popular speaker Board Certified in Labor & Employment Law, Ms. Stamer presently serves as Co-Chair of the ABA RPTE Section Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Committee, an ABA Joint Committee on Employee Benefits Representative, an Editorial Advisory Board Member of the Institute of Human Resources (IHR/HR.com), Insurance Thought Leadership,com and Employee Benefit News, and various other publications. With extensive domestic and international regulatory and public policy experience, Ms. Stamer also has worked extensively domestically and internationally on public policy and regulatory advocacy on health and other employee benefits, human resources, insurance, tax, compliance and other matters and representing clients in dealings with the US Congress, Departments of Labor, Treasury, Health & Human Services, as well as state legislatures, attorneys general, insurance and labor departments, and other agencies and regulators. A prolific author and popular speaker, Ms. Stamer regularly authors materials and conducts workshops and professional, management and other training and serves on the faculty and planning committees of a multitude of symposium and other educational programs. See http://www.CynthiaStamer.com. for more details.

About Solutions Law Press, Inc.™

Solutions Law Press, Inc.™ provides business and management information, tools and solutions, training and education, services and support to help organizations and their leaders promote effective management of legal and operational performance, regulatory compliance and risk management, data and information protection and risk management and other key management objectives.  Solutions Law Press, Inc.™ also conducts and assist businesses and associations to design, present and conduct customized programs and training targeted to their specific audiences and needs.

For Added Information and Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

For additional information about upcoming programs, to inquire about becoming a presenting sponsor for an upcoming event, e-mail your request to info@Solutionslawpress.com   These programs, publications and other resources are provided only for general informational and educational purposes. Neither the distribution or presentation of these programs and materials to any party nor any statement or information provided in or in connection with this communication, the program or associated materials are intended to or shall be construed as establishing an attorney-client relationship,  to constitute legal advice or provide any assurance or expectation from Solutions Law Press, Inc., the presenter or any related parties. If you or someone else you know would like to receive future Alerts or other information about developments, publications or programs or other updates, send your request to info@solutionslawpress.com.  If you would prefer not to receive communications from Solutions Law Press, Inc. send an e-mail with “Solutions Law Press Unsubscribe” in the Subject to support@solutionslawyer.net.  CIRCULAR 230 NOTICE: The following disclaimer is included to comply with and in response to U.S. Treasury Department Circular 230 Regulations.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN. If you are an individual with a disability who requires accommodation to participate, please let us know when you register so that we may consider your request.   ©2014 Solutions Law Press, Inc.  All rights reserved.

 


EBSA Invites Input By November 19 On Need for More Regulation Of Investment Windows

August 20, 2014

November 19, 2014 is the deadline for commenting on a request for information on the use of brokerage windows, self-directed brokerage accounts and similar features in 401(k)-type plans schedule for publication by the Department of Labor in tomorrow’s (August 21, 2014) Federal Register.  An advanced copy of the RFI can be viewed here.

Some 401(k)-type plans offer participants access to brokerage windows in addition to, or in place of, specific investment options chosen by the employer or another plan fiduciary. These “window” arrangements can enable or require individual participants to choose for themselves from a broad range of investments. The department received a number of questions about brokerage windows after the publication of a final regulation on participant-level fee disclosure.

According to Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi,  the Labor Department’s goal in issuing this RFI is to determine whether, and to what extent, regulatory standards or other guidance about the use of brokerage windows may be necessary to adequately protect participants’ retirement savings.  To this end, the RFI asks questions on brokerage windows, including: the scope of investment options typically available through a window; demographic and other information about participants who commonly use brokerage windows; the process of selecting a brokerage window and provider for a plan; the costs of brokerage windows; and what kind of information about brokerage windows and underlying investment options typically is available and disclosed to participants.

Plan fiduciaries, sponsors, and service providers with plans offering these brokerage windows should act promptly to submit their input by the November 19, 2014 deadline.

For Advice, Training & Other Resources

If you need assistance monitoring these and other regulatory policy, enforcement, litigation or other developments, or to review or respond to these or other workforce, benefits and compensation, performance and risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

Board Certified in Labor & Employment Law, Past Chair of the ABA RPTE Employee Benefit & Other Compensation Arrangements Group, Co-Chair and Past Chair of the ABA RPTE Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Plans Committee, an ABA Joint Committee On Employee Benefits Council representative, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a Fellow in the American College of Employee Benefit Counsel, ABA, and State Bar of Texas, Ms. Stamer has more than 25 years’ experience advising health plan and employee benefit, insurance, financial services, employer and health industry clients about these and other matters. Ms. Stamer has extensive experience advising and assisting health plans and insurers about ACA, and a wide range of other plan design, administration, data security and privacy and other compliance risk management policies.  Ms. Stamer also regularly represents clients and works with Congress and state legislatures, EBSA, IRS, EEOC, OCR and other HHS agencies, state insurance and other regulators, and others.   She also publishes and speaks extensively on health and other employee benefit plan and insurance, staffing and human resources, compensation and benefits, technology, public policy, privacy, regulatory and public policy and other operations and risk management concerns. Her publications and insights appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications.

You can review other recent human resources, employee benefits and internal controls publications and resources and additional information about the employment, employee benefits and other experience of the Cynthia Marcotte Stamer, PC here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile www.cynthiastamer.com or by registering to participate in the distribution of these and other updates on our HR & Employee Benefits Update distributions here including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating or updating your profile here. For important information about this communication click here

NOTE:  This article is provided for educational purposes.  It is does not establish any attorney-client relationship nor provide or serve as a substitute for legal advice to any individual or organization.  Readers must engage properly qualified legal counsel to secure legal advice about the rules discussed in light of specific circumstances.

The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations.  The Regulations now require that either we (1) include the following disclaimer in most written Federal tax correspondence or (2) undertake significant due diligence that we have not performed (but can perform on request).

ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, or (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2014 Cynthia Marcotte Stamer. Limited, non-exclusive right to republished granted to Solutions Law Press, Inc. All other rights reserved.


Some Group Health Plans Face 8/18 Deadline To Correct Form 8963 Under Notice 2014-47 Risk Adjustment Fee Guidance

August 12, 2014

Group health plan sponsors and third party administrators of certain group health plans who already filed their Form 8963, “Report of Health Insurance Provider Information,” who expect that their group health plan will be  exempt in the 2014 fee year from the temporary risk adjustment fee assessment imposed by the Patient Protection & Affordable Care Act (ACA)  based on impending guidance scheduled for publication on September 2, 2014 in Notice 2014-47 may need to act quickly to meet the August 18, 2014 deadline for filing a corrected Form 8963, “Report of Health Insurance Provider Information.”

The temporary reinsurance fee and risk adjustment provisions of ACA are intended to generate $25 billion in revenues from assessments on insured and self-insured group health plans that the federal government plans to use to partially reimburse commercial insurers writing policies in public exchanges for individuals with high health care costs.

ACA generally provides that the reinsurance fee applies to covered entities that are not excluded under ACA in 2014, 2015, and 2016. Under Final Rules published March 5, 2014, the insurer pays the fee for insured plans but where a group health plan is self-insured, the plan itself pays the fee.   Final Rules published March 5, 2014 provide that self-insured and self-administered plans are exempt from the fees in 2015 and 2016, however.

The reinsurance fee equals the yearly rate times the number of plan participants. The yearly rate is $63 for 2014, $44 for 2015, and to be announced for 2016.

ACA § 9010 generally requires payment of the temporary risk adjustment fee ($64 per covered person for 2014) by every “covered entity.  ACA § 9010 defines the term “covered entity” to include every entity that provides health insurance for any United States health risk during the calendar year in which the fee is due (the fee year) other than those excluded under ACA § 9010(c)(2).  However,  ACA § 9010(c)(2) generally excludes from the definition of covered entity:

  • Self-insured employers;
  • Governmental entities;
  • Certain nonprofit corporations; and
  • Non-employer established voluntary employees beneficiary associations under Internal Revenue Code § 501(c)(9) entities.

Notice 2014-47 scheduled for publication on September 2 by the Department of Treasury (Treasury) will clarify the group health plans exempted from the obligation to pay the temporary risk adjustment fee imposed by Section 9010 of ACA on “covered entities” in IRB 2014-36 will clarify:

  • When a group health plan qualifies as excluded from the general definition of “covered entity” under the exclusions set forth in ACA § 9010(c)(2); and
  • That a controlled group does not have to report for a controlled group member who would not qualify as a covered entity in the 2014 fee year if it were a single-person covered entities.

According to Notice 2014-47:

  • For the 2014 fee year, the IRS and Treasury will not treat any entity as a covered entity if it is excluded from the definition of a covered entity because it qualifies for one of the exclusions under § 9010(c)(2) for the entire 2013 data year or qualifies for one of the exclusions under § 9010(c)(2) for the entire 2014 fee year, which began on January 1, 2014. Since the IRS and Treasury will not treat such an entity as a covered entity, it should not report its net premiums written for the 2013 data year.
  • For the 2014 fee year, a controlled group must report net premiums written only for those persons who are controlled group members at the end of the day on December 31 of the 2013 data year and who would qualify as a covered entity in the fee year if it were a single-person covered entity. A controlled group should not report net premiums written for any controlled group member who would not qualify as a covered entity in the 2014 fee year if it were a single-person covered entity. Such entity will be treated as a member of the controlled group for other purposes, however, such as joint and several liability for the fee amount allocated to the controlled group.
  • The IRS and Treasury will publish additional guidance in the future about the scope of the exclusions in ACA § 9010(c)(2) from the general definition of the term covered entity for fee years after the 2014 fee year.
  • Any entity that needs to correct a previously submitted Form 8963, “Report of Health Insurance Provider Information,” due to the clarification provided in this notice must do so by faxing the corrected Form 8963 to 877-797-0235 (a toll-free number) no later than Monday, August 18, 2014. The IRS cannot process a Form 8963 received after this date. The IRS and Treasury recognize that entities will not know whether they qualify for one of the exclusions under § 9010(c)(2) for the entire 2014 fee year until the end of 2014. Entities that reasonably project that they will qualify for an exclusion under § 9010(c)(2) for the entire 2014 fee year may submit a corrected Form 8963 on or before August 18, 2014, even though the 2014 fee year is not yet over.

The clarifying guidance of Notice 2014-47 comes as the Department of Health & Human Services (HHS) is warning group health insurers third party administrators (TPAs) of self-insured group health plans that are covered entities to get moving on their preparations to register and conduct required interactions with the EDGE Server that HHS plans to use to collect and administer the data necessary to administer the temporary reinsurance fee and risk adjustment provisions of ACA by mid-September, 2014.

Group health plans and their administrators are urged to evaluate and confirm their status and if necessary, file a corrected Form 8963 no later than August 18, 2014.  Additionally, any health insurance issuer or non-excepted group health plan should ensure that appropriate arrangements are in place to fulfill responsibilities for registration and use of the EDGE system as required to meet the reporting requirements.

For Advice, Training & Other Resources

If you need assistance monitoring these and other regulatory policy, enforcement, litigation or other developments, or to review or respond to these or other workforce, benefits and compensation, performance and risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

Board Certified in Labor & Employment Law, Past Chair of the ABA RPTE Employee Benefit & Other Compensation Arrangements Group, Co-Chair and Past Chair of the ABA RPTE Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Plans Committee, an ABA Joint Committee On Employee Benefits Council representative, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a Fellow in the American College of Employee Benefit Counsel, ABA, and State Bar of Texas, Ms. Stamer has more than 25 years’ experience advising health plan and employee benefit, insurance, financial services, employer and health industry clients about these and other matters. Ms. Stamer has extensive experience advising and assisting health plans and insurers about ACA, and a wide range of other plan design, administration, data security and privacy and other compliance risk management policies.  Ms. Stamer also regularly represents clients and works with Congress and state legislatures, EBSA, IRS, EEOC, OCR and other HHS agencies, state insurance and other regulators, and others.   She also publishes and speaks extensively on health and other employee benefit plan and insurance, staffing and human resources, compensation and benefits, technology, public policy, privacy, regulatory and public policy and other operations and risk management concerns. Her publications and insights appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications.

You can review other recent human resources, employee benefits and internal controls publications and resources and additional information about the employment, employee benefits and other experience of the Cynthia Marcotte Stamer, PC here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile www.cynthiastamer.com or by registering to participate in the distribution of these and other updates on our HR & Employee Benefits Update distributions here including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating or updating your profile here. For important information about this communication click here

NOTE:  This article is provided for educational purposes.  It is does not establish any attorney-client relationship nor provide or serve as a substitute for legal advice to any individual or organization.  Readers must engage properly qualified legal counsel to secure legal advice about the rules discussed in light of specific circumstances.

The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations.  The Regulations now require that either we (1) include the following disclaimer in most written Federal tax correspondence or (2) undertake significant due diligence that we have not performed (but can perform on request).

ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, or (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2014 Cynthia Marcotte Stamer. Limited, non-exclusive right to republished granted to Solutions Law Press, Inc. All other rights reserved.


HHS Warns Insurers, TPAS Complete ACA Reinsurance & Risk Adjustment Edge Server Pre-Registration Steps By 9/27

August 8, 2014

The Department of Health & Human Services (HHS) is warning group health insurers third party administrators (TPAs) of self-insured group health plans and to get moving on their preparations to register and conduct required interactions with the EDGE Server that HHS plans to use to collect and administer the data necessary to administer the temporary reinsurance fee and risk adjustment provisions of the Patient Protection & Affordable Care Act (ACA).  HHS says insurers and TPAs have work to complete by 9/27 to prepare to comply with the EDGE system data reporting that HHS will require them to conduct as part of ACA’s reinsurance premium and risk adjustment risk sharing provisions.

The temporary reinsurance fee and risk adjustment provisions of ACA are intended to generate $25 billion in revenues from assessments on insured and self-insured group health plans that the federal government plans to use to partially reimburse commercial insurers writing policies in public exchanges for individuals with high health care costs.

ACA provides that the reinsurance fee applies in 2014, 2015, and 2016. Under Final Rules published March 5, 2014, the insurer pays the fee for insured plans but where a group health plan is self-insured, the plan itself pays the fee.   Final Rules published March 5, 2014 provide that self-insured and self-administered plans are exempt from the fees in 2015 and 2016, however.

The reinsurance fee equals the yearly rate times the number of plan participants. The yearly rate is $63 for 2014, $44 for 2015, and to be announced for 2016.

The Centers for Medicare and Medicaid Services (CMS) plans to run the first risk adjustment and reinsurance calculation estimates in mid-December, 2014 using data to be collected from insurers and TPAs on the EDGE system.

In an August 7, 2014 webinar, HHS gave issuers and TPAs an overview of the EDGE server implementation schedule and guidance on the key pre-registration tasks that must be completed prior to the start of the EDGE server registration process scheduled to begin on September 27, 2014.

HHS warned issuers and TPAs must be ready to start the EDGE registration process on September 27, 2014 in order to have sufficient time to set-up their servers and test their data submissions prior to the mid-December estimate calculations.

In the webinar, HHS outlined a series of key pre-registration activities that issuers and TPAs of self-insured health plans impacted by the new requirements need to complete between now and September 26, 2014, in order to prepare for EDGE implementation.

Review the pre-registration checklist, timeline and other information shared by CMS in the 90-minute presentation here.

For Advice, Training & Other Resources

If you need assistance monitoring these and other regulatory policy, enforcement, litigation or other developments, or to review or respond to these or other workforce, benefits and compensation, performance and risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

Board Certified in Labor & Employment Law, Past Chair of the ABA RPTE Employee Benefit & Other Compensation Arrangements Group, Co-Chair and Past Chair of the ABA RPTE Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Plans Committee, an ABA Joint Committee On Employee Benefits Council representative, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a Fellow in the American College of Employee Benefit Counsel, ABA, and State Bar of Texas, Ms. Stamer has more than 25 years’ experience advising health plan and employee benefit, insurance, financial services, employer and health industry clients about these and other matters. Ms. Stamer has extensive experience advising and assisting health plans and insurers about ACA, and a wide range of other plan design, administration, data security and privacy and other compliance risk management policies.  Ms. Stamer also regularly represents clients and works with Congress and state legislatures, EBSA, IRS, EEOC, OCR and other HHS agencies, state insurance and other regulators, and others.   She also publishes and speaks extensively on health and other employee benefit plan and insurance, staffing and human resources, compensation and benefits, technology, public policy, privacy, regulatory and public policy and other operations and risk management concerns. Her publications and insights appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications.

You can review other recent human resources, employee benefits and internal controls publications and resources and additional information about the employment, employee benefits and other experience of the Cynthia Marcotte Stamer, PC here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile www.cynthiastamer.com or by registering to participate in the distribution of these and other updates on our HR & Employee Benefits Update distributions here including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating or updating your profile here. For important information about this communication click here

NOTE:  This article is provided for educational purposes.  It is does not establish any attorney-client relationship nor provide or serve as a substitute for legal advice to any individual or organization.  Readers must engage properly qualified legal counsel to secure legal advice about the rules discussed in light of specific circumstances.

The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations.  The Regulations now require that either we (1) include the following disclaimer in most written Federal tax correspondence or (2) undertake significant due diligence that we have not performed (but can perform on request).

ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, or (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2014 Cynthia Marcotte Stamer. Limited, non-exclusive right to republished granted to Solutions Law Press, Inc. All other rights reserved.


HHS Extends Proposed EDI Rule Time to 4/3 To Get More Input From Self-Insured Plans, TPAs

March 6, 2014

Third party administrators  (TPAs), self-insured health plans and concerned payers and plan sponsors now have a little more time to comment on the Department of Health & Human Services (HHS) proposed rule, “Administrative Simplification: Health Plan Certification of Compliance.”

HHS announced its extension to April 3, 2014 of the comment period today in specific hopes that it will receive additional comments from TPAs  and self-insured plans

The Certification of Compliance for Health Plans proposed rule is different from previous Health Insurance Portability and Accountability Act (HIPAA) Administrative Simplification regulations because it affects more and different types of entities.

For example, many third party administrators, self-funded health plans, and group health plans that have not been impacted by previous HIPAA Administrative Simplification requirements will be affected by this rule, even if they do not directly conduct HIPAA covered transactions.

As proposed, the proposed rule would require controlling health plans to submit documentation on or before December 31, 2015. It would also establish penalty fees for a controlling health plan that fails to comply with the Certification of Compliance requirements.

HHS says that the goal of the extension of the comment period is to provide these entities with time to understand and offer feedback on the business impacts of the Certification of Compliance proposed rule. HHS encourages these entities to submit feedback so that their comments and suggestions can be considered during the policy-making process.

 For Representation, Training & Other Resources

If you need assistance monitoring these and other regulatory policy, enforcement, litigation or other developments, or to review or respond to these or other workforce, benefits and compensation, performance and risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

Board Certified in Labor & Employment Law, Past Chair of the ABA RPTE Employee Benefit & Other Compensation Arrangements Group, Co-Chair and Past Chair of the ABA RPTE Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Plans Committee, Vice President of the North Texas Health Care Compliance Professionals Association, Past Chair of the ABA Health Law Section Managed Care & Insurance Section and the former Board Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer has more than 25 years’ experience advising health plan and employee benefit, insurance, financial services, employer and health industry clients about these and other matters. Ms. Stamer has extensive experience advising and assisting health care providers, health plans, their business associates and other health industry clients to establish and administer medical privacy and other compliance and risk management policies, to health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. The scribe for the ABA JCEB Annual Agency Meeting with the Office of Civil Rights (OCR) for the past several years who has worked on medical and other privacy concerns throughout her career, she regularly designs and presents HIPAA and other risk management, compliance and other training for health plans, employers, health care providers, professional associations and others, defends covered entities and business associates against OCR, FTC and other privacy and data security investigations, serves as special counsel in litigation arising from these concerns and is the author of several highly regarded publications on HIPAA and other privacy and security concerns.

Ms. Stamer also regularly works with OCR, FTC, USSS, FBI and state and local law enforcement on privacy, data security, health care, benefits and insurance and other matters, publishes and speaks extensively on medical and other privacy and data security, health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her publications and insights appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications. For instance, Ms. Stamer for the third year will serve as the appointed scribe for the ABA Joint Committee on Employee Benefits Agency meeting with OCR. Her insights on HIPAA risk management and compliance frequently appear in medical privacy related publications of a broad range of health care, health plan and other industry publications Among others, she has conducted privacy training for the Association of State & Territorial Health Plans (ASTHO), the Los Angeles Health Department, the American Bar Association, the Health Care Compliance Association, a multitude of health industry, health plan, insurance and financial services, education, employer employee benefit and other clients, trade and professional associations and others.  You can get more information about her HIPAA and other experience here.

You can review other recent human resources, employee benefits and internal controls publications and resources and additional information about the employment, employee benefits and other experience of the Cynthia Marcotte Stamer, PC here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile www.cynthiastamer.com or by registering to participate in the distribution of these and other updates on our HR & Employee Benefits Update distributions here including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating or updating your profile here. For important information concerning this communication click here©2014 Cynthia Marcotte Stamer. Limited, non-exclusive right to republished granted to Solutions Law Press, Inc. All other rights reserved.


HHS Share Model HIPAA Notices 1 Week Before Deadline For Updating Business Associate Agreements

September 16, 2013

A week before the September 23, 2013 deadline for all health care providers, health plans, health care clearinghouses (Covered Entities) and their business associates to have updated their business associate agreements to comply with the Final Omnibus HIPAA Rule, the Department of Health & Human Services Office of the National Coordinator for Health Information Technology (ONC) and the Office for Civil Rights (OCR) today (September 16, 2013) released Model Notices of Privacy Practices (Notices) for health care providers and health plans to use to communicate with their patients and plan members. With penalties and enforcement continuing to rise, Covered Entities and their business associates should take appropriate steps to review and update their privacy and breach notification policies and procedures, privacy officer appointments, notices of privacy practices, business associate agreements and other HIPAA compliance and risk management documentation, practices, procedures and coverage, breach notification and other HIPAA compliance and risk management practice.

Model HIPAA Notices

Developed collaboratively by ONC and OCR the Notices available here designed in the following three different styles are designed for users to customize to fit their specific needs and practices:

  • A notice in the form of a booklet;
  • A layered notice with a summary of the information on the first page and full content on the following pages; and
  • A notice with the design elements of the booklet, but that is formatted for full-page presentation.

Use of these model Notices is optional.  While the agencies designed the Notices to let Covered Entities to use these models by entering some of their own information into the model, such as contact information, and then printing for distribution and posting on their websites, Covered Entities should consult with legal counsel to determine the suitability of the Notices generally for their entity’s use and any customization, if any, that may be recommended or required to a Notice if the Covered Entity decides rely upon a model Notice to prepare its Notice of Privacy Practices.  To facilitate any tailoring, the agencies provided a text-only version for Covered Entities wishing only wish to use the content with or without tailoring.

September 23 Business Associate Agreement Update Deadline

September 23, 2013 also is the final deadline established in the Final Omnibus HIPAA Rule for Covered Entities and their business associations to update the business associate agreements required by HIPAA to reflect application of the breach notification, business associate, and many of HIPAA’s requirements to directly cover business associates and other aspects of the Health Information Technology for Economic and Clinical Health (HITECH) Act enacted as part of the American Recovery and Reinvestment Act of 2009.  While HHS published a Sample Business Associate Agreement last June to aid Covered Entities and their business associates with understanding the business associate agreement requirements as impacted by the Omnibus Final HIPAA Rule, it also made clear that Covered Entities and their business associates should tailor their business associate agreements to fit their specific circumstances and relationships.  OCR National Office and regional officials speaking about their findings about past business associate agreement compliance have indicated that their audit and enforcement activities show widespread compliance issues among Covered Entities and business associates with the original business associate agreements.  OCR clearly expects Covered Entities and their business associates to address and resolve these compliance issues going forward.

Covered Entities and their business associates are increasingly at peril if caught violating HIPAA’s Privacy, Security or Breach Notification rules.  With the HITECH Act Breach Notification rules now requiring Covered Entities to self-disclose breaches, OCR becomes aware of breaches much more easily.  Coupled with the HITECH Act’s increase in sanctions for HIPAA violations, Covered Entities and, beginning September 23, 2013, their business associates face rising risks for violating HIPAA.  See, e.g. HHS Settles with Health Plan in Photocopier Breach Case; WellPoint Settles HIPAA Security Case for $1,700,000; Shasta Regional Medical Center Settles HIPAA Security Case for $275,000; Idaho State University Settles HIPAA Security Case for $400,000; and HHS announces first HIPAA breach settlement involving less than 500 patients.

In response to the updated Final Regulations and these expanding HIPAA enforcement and exposures, all Covered Entities should review critically and carefully the adequacy of their current HIPAA Privacy and Security compliance policies, monitoring, training, breach notification and other practices taking into consideration OCR’s investigation and enforcement actions, emerging litigation and other enforcement data; their own and reports of other security and privacy breaches and near misses; and other developments to decide if additional steps are necessary or advisable.   In response to these expanding exposures, all covered entities and their business associates should review critically and carefully the adequacy of their current HIPAA Privacy and Security compliance policies, monitoring, training, breach notification and other practices taking into consideration OCR’s investigation and enforcement actions, emerging litigation and other enforcement data; their own and reports of other security and privacy breaches and near misses, and other developments to decide if tightening their policies, practices, documentation or training is necessary or advisable.

For Help or More Information

If you need assistance responding to HIPAA or other health industry regulatory, enforcement or other developments, reviewing or tightening your policies and procedures, conducting training or audits, responding to or defending an investigation or other enforcement actions; with 2014 health plan decision-making, or with reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte Stamer for help.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer is widely recognized for her extensive work, publications, and thought leadership on HIPAA and other privacy and data security issues.  Scribe for the ABA JCEB annual Technical Sessions meeting with OCR for the past three years, Ms. Stamer’s experience includes extensive work advising, representing and training health plan, health insurance, health IT, health care and other clients on HIPAA and other privacy, data protection and breach and other related matters and represents and advises these and other clients in responding to OCR Privacy and Civil Rights and other HHS agencies, Labor Department, IRS regulations, investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns.  She also is recognized for her extensive publications and programs including numerous highly regarding publications and programs on HIPAA and other privacy and data security concerns as well as a wide range of other workshops, programs and publications.

Beyond her HIPAA involvement, Ms. Stamer also continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, HR.com, Insurance Thought Leadership, Solutions Law Press, Inc. and other publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

For important information about this communication see here. THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2013 Cynthia Marcotte Stamer, P.C. 

Nonexclusive license to republish granted to Solutions Law Press, Inc.  All other rights reserved.


[*] On January 24, 2013, the Department of Labor (the Department) issued guidance stating the Department’s conclusion that the notice requirement under FLSA section 18B will not take effect on March 1, 2013 for several reasons until further guidance setting the extended deadline was published.


IRS Publishes Final Health Reform Individual Shared Responsibility Rules

September 1, 2013

Starting in 2014, the Individual Shared Responsibility mandate of the Patient Protection & Affordable Care Act (ACA) dictates that each individual American either have minimum essential coverage for each month, qualify for an exemption, or make a payment when filing his or her federal income tax return.  In anticipation of the implementation of this Individual Shared Responsibility mandate, the Department of the Treasury and the Internal Revenue Service (IRS) published final regulations implementing the Individual Shared Responsibility mandate in the Internal Revenue Code. The guidance contained in these final regulations provide each American with critical information about their families’ potential exposure to liability for the individual shared responsibility tax in 2014 as well as key insights for employers.  Solutions Law Press, Inc.  authors are finalizing various articles on certain key aspects of these new regulations for publication over the next few days. Stay tuned for more details!

For each month beginning after December 31, 2013, Internal Revenue Code Section 5000A’s Individual Shared Responsibility mandate requires that individual Americans either qualify as exempt, maintain minimum essential coverage for themselves and any nonexempt family members, or pay an individual shared responsibility payment when paying their Federal income tax return.  A taxpayer will be obligated to pay the individual shared responsibility tax under Internal Revenue Code Section 5000A for any non-exempt individual the taxpayer claims on his or her individual tax return as a dependent who is not exempt or enrolled in minimum essential coverage.

Under § 5000A(f)(2), minimum essential coverage includes coverage under an eligible employer-sponsored plan.

The final regulations set the rules that the IRS will use to decide when an individual American will become liable for paying the tax imposed by ACA for failing to maintain the minimum required health insurance coverage mandated by ACA beginning January 1, 2013 and other related rules.  While specifically addressing the obligations of individual Americans to pay the Individual Shared Responsibility payment, the final rules coupled with the availability of the new option for individual Americans to buy coverage through an ACA-qualified federal health care exchange and, depending on the adjusted household income of the individual, potentially also to receive tax credits for enrolling in coverage through an exchange is likely to impact the enrollment choices that employed individuals make about enrolling in coverage offered by their employer versus in coverage through a federally qualified health insurance exchange.  Accordingly, both individual Americans and the businesses that employ them should act quickly to understand the key aspects of the final regulations and their implications.

When considering the effect of these final regulations, employers and individual Americans should keep in mind that Notice 2013-42, issued on June 26, 2013, provides limited transition relief from the Individual Shared Responsibility mandate for employees and their families who are eligible to enroll in certain employer-sponsored health plans with a plan year other than a calendar year if the plan year begins in 2013 and ends in 2014. For additional information on the Individual Shared Responsibility provision, the final regulations and Notice 2013-42, see the IRS questions and answers.

Coming slightly less than a month before the October 1, 2013 scheduled opening of the first enrollment period for individual Americans to enroll in health care coverage through a federally qualified health insurance exchange created pursuant to ACA and the deadline for employers to deliver the notice of the availability of this option dictated by Fair Labor Standards Act 18B,  the final regulations and Obama Administration’s announced plans to enforce its provisions has drawn criticism from a number of groups.  While the Obama Administration has indicated that it still plans to enforce the Individual Shared Responsibility mandate against individual Americans, it announced in July, 2013 that it would delay enforcement of the Employer Shared Responsibility Mandate rules of Internal Revenue Code Section 4980H until 2015.  Many consumer rights groups and others are arguing that the Administration should also delay its enforcement of the Individual Shared Responsibility Mandate in light of its delay of enforcement of Internal Revenue Code Section 4980H against businesses.   Pending a reversal of its position or Congressional relief, the final regulation signal to individual Americans and their employers to prepare to deal with the new Individual Shared Responsibility Mandate beginning in January, 2014.

While the delay in enforcement of the Section 4980H employer shared responsibility payment until 2015 means that employers will not incur liability for failing to provide coverage meeting the minimum essential coverage, minimum value and affordability standards of Internal Revenue Code Section 4980H, the impending implementation of the Individual Shared Responsibility mandate of Internal Revenue Code Section 5000A and the impending availability of tax credits for certain individuals with Household Adjusted Gross Incomes of less than 400 percent of the poverty level almost certainly will influence enrollment decisions that employees make concerning coverage offered by their employer, if any.  Employers  can expect that employee choices about enrolling in employer-sponsored group health coverage will be influenced by the impending obligation to enroll in coverage or pay the individual shared responsibility tax in 2014 governed by the final regulations.  Employers can expect that employee concern about these exposures will prompt many employees to carefully scrutinize and in some cases question the information and implications of information provided by the employer or its plan such as the Section 18B notice that employers must provide by October 1, 2013, the summary of benefits and coverage (SBC) that the Affordable Care Act obligations the employer or plan to provide as the employees work to sort out their choices.  As these and other plan communications are likely to face significant scrutiny, employers and their employee benefit plan fiduciaries and administrators should use extra care to ensure that these and other plan documents and communications are carefully and precisely tailored to accurately convey all material plan terms.

For Help or More Information

If you need help understanding or dealing with these impending notification requirements, with other 2014 health plan decision-making or preparation, or with reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, HR.com, Insurance Thought Leadership, Solutions Law Press, Inc. and other publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

For important information about this communication see here. THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2013 Cynthia Marcotte Stamer, P.C. 

Nonexclusive license to republish granted to Solutions Law Press, Inc.  All other rights reserved.


[*] On January 24, 2013, the Department of Labor (the Department) issued guidance stating the Department’s conclusion that the notice requirement under FLSA section 18B will not take effect on March 1, 2013 for several reasons until further guidance setting the extended deadline was published.


Impending 10/1 Exchange Notice & Other New Notice Deadlines Cut Time Short For Employers To Finalize 2014 Health Plan Terms & Contracts

August 21, 2013

Employer and union group health plan sponsors and insurers of group and individual health plans (Health Plans) agonizing over 2014 plan design decisions are running out of time. Impending deadlines to update and deliver the initial Exchange Notice by October 1, 2013, the Summary of Benefits and Communications (SBC) disclosure before their next enrollment period begins, and 60-day prior notice of material reductions in benefits or services under the plan mandated by the Patient Protection and Affordable Care Act (ACA) require employers or other sponsors to finalize design decisions and amendments well in advance of January 1, 2014.  These new notification obligations create added urgency and pressure for Health Plans and their employer and other sponsors to finalize and implement their decisions on their Health Plans 2014 plan designs and coverages and make the necessary determinations to prepare and timely deliver the required notifications in accordance with these new notification mandates well before the start of the 2014 plan year or its enrollment period. Employers who in the past have put off these decisions until the last month of the plan year no longer can legally do so.

ACA Exchange Notices Due By October 1

One of the biggest time constraints for finalizing 2014 plan designs, contracts and terms is the impending October 1, 2014 deadline for employers to provide the notice required by Fair Labor Standards Act Section 18B.

Regardless of if the employer sponsors a health plan or when the next plan enrollment period begins, all employers covered by the FLSA generally are required deliver a notice to employees about the new option beginning January 1, 2014 to get health care coverage through a health care exchange (now rebranded by the Obama Administration as a “Marketplace”)(Marketplace) created by ACA that meets the requirements of new FLSA Section 18B enacted Section 1512 of ACA.

Absent a delay or other reprieve from the Obama Administration or Congress,  Open enrollment for health insurance coverage through the Marketplace begins October 1, 2013.  Individuals and employees of small businesses beginning October 1, 2013 can apply for and, beginning January 1, 2014 to buy health care coverage offered through the Marketplace established under ACA for their state (including the Federal Marketplace for states that did not elect to establish their own Marketplace). Some individuals who earn less than 400% of the federal poverty level and meet certain other conditions also are slated to qualify to receive federal subsidies that will pay all or part of the cost of buying coverage through a Marketplace.

To promote awareness among employees of the Marketplace as an option for getting health coverage, creates a new FLSA Section 18B requiring a notice (Exchange Notice) to employees of coverage options available through the Marketplace.  Originally required by March 1, 2013,[*] the Department of Labor (DOL) extended the deadline for providing the Exchange Notice to October 1, 2013.  Employers must provide a notice of coverage options to each employee, regardless of plan enrollment status (if applicable) or of part-time or full-time status. Employers are not required to provide a separate notice to dependents or other individuals who are or may become eligible for coverage under the plan but who are not employees.

All FLSA-Covered Employers Must Provide Exchange Notices Beginning October 1, 2013

Under FLSA Section 18B of the FLSA, each applicable employer must provide each employee at the time of hiring (or with respect to current employees, by October 1, 2013), a written notice that fulfills the applicable Exchange Notice requirements as set forth in the DOL Regulations.

The FLSA section 18B requirement to provide a notice to employees of coverage options applies to all   employers subject to the FLSA. In general, the FLSA applies to employers that employ one or more employees who are engaged in, or produce goods for, interstate commerce. For most firms, a test of not less than $500,000 in annual dollar volume of business applies. The FLSA also specifically covers the following entities: hospitals; institutions primarily engaged in the care of the sick, the aged, mentally ill, or disabled who reside on the premises; schools for children who are mentally or physically disabled or gifted; preschools, elementary and secondary schools, and institutions of higher education; and federal, state and local government agencies.  Employers questioning whether their business is subject to the FLSA should seek the assistance of legal counsel experienced with the FLSA.

Timing and Delivery of Notice

Employers are required to provide the Exchange Notice to each new employee at the time of hiring beginning October 1, 2013. For 2014, the Department will consider a notice to be provided at the time of hiring if the notice is provided within 14 days of an employee’s start date.

For employees who are current employees before October 1, 2013, employers must provide the Exchange Notice no later than October 1, 2013.

The Exchange Notice must be provided in writing in a manner calculated to be understood by the average employee. Employers may deliver the Exchange Notice by first-class mail or, if the electronic notification requirements of the Department of Labor’s electronic disclosure safe harbor at 29 CFR 2520.104b-1(c) are met, electronically.

Required Content of Exchange Notice

The Exchange Notice content mandated by FLSA Section 18B is fairly limited.  Section 18B requires that the Exchange Notice only dictates three required elements:

  • Inform employees of coverage options, including information about the existence of the new Marketplace as well as contact information and description of the services provided by a Marketplace;
  • Inform the employee that the employee may be eligible for a premium tax credit under Section 36B of the Code if the employee purchases a qualified health plan through the Marketplace; and
  • Include a statement informing the employee that if the employee purchases a qualified health plan through the Marketplace, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes.  At minimum, this generally requires that the Exchange Notice distributed by an employer must inform the employee.

Interim DOL guidance implementing these requirements construes the content requirements as requiring that the Exchange Notice tell the employee:

  • Of the existence of the Marketplace (referred to in the statute as the Exchange) including a description of the services provided by the Marketplace, and the way the employee may contact the Marketplace to request assistance;
  • That the employee may be eligible for a premium tax credit or subsidy under Section 36B of the Internal Revenue Code (the Code) if the employee purchases a qualified health plan through the Marketplace and the employer does not offer coverage to the employee under a group health plan that is considered to provide “Minimum Value” for purposes of ACA; and
  • That if the employee purchases a qualified health plan through the Marketplace, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes.

Allow Adequate Time To Do Analysis, Complete Other Steps To Prepare Exchange Notices

Employers should resist the urge to allow the shortness of the list of information required that FLSA Section 18B requires in the Exchange Notice lure them into underestimating the time and effort required to prepare the Exchange Notification.  For many employers, determining if the Health Plan provides Minimum Value can be time-consuming and complex.

For this, the SBC notice discussed later in this update and other purposes, Code Section 36B(c)(2)(C)(ii) provides that an employer-sponsored Health Plan provides Minimum Value if the ratio of the share of total costs paid by the Health Plan relative to the total costs of covered services is no less than 60% of the anticipated covered medical spending for covered benefits paid by a group health plan for a standard population, computed in accordance with the plan’s cost-sharing, and divided by the total anticipated allowed charges for covered benefits provided to a standard population is no less than 60%.  See Patient Protection and ACA: Standards Related to Essential Health Benefits, Actuarial Value, and Accreditation Regulation.

Existing regulations require the employers to get an actuarial certification to determine if its Health Plan provides Minimum Value unless the employer can show that the Health Plan fits the criteria to use and satisfies this test using either the Minimum Value Calculator or an applicable safe harbor design approved by HHS, Treasury and DOL.  These determinations often are time consuming and complex requiring careful review and analysis of the group health plan coverage and benefits.  Many self-insured or other group health plans have plan designs that prevent the employer from relying on the Minimum Value Calculator or design safe harbors.  If the employer cannot rely upon the Minimum Value Calculator or one of the design safe harbors, an actuarial certification will be needed.  Employers need to allow sufficient time to make these determinations in time to complete and deliver the Exchange Notices.

Employers should particularly expect to need to obtain an actuarial certification to determine if the Health Plan provides Minimum Value determination if the Health Plan is taking advantage of temporary relief from the cost sharing limitations of ACA for 2014 announced by the Obama Administration in February and reconfirmed in July, that for 2014 allows Health Plans to apply a separate ACA-compliant out-of-pocket maximum to prescription drug benefits from the ACA-compliant out-of-pocket maximum applied to all other benefits subject to ACA’s cost sharing restrictions.   Since the Minimum Value Calculator cannot take into account this option, however, employers planning to apply a separate out-of-pocket maximum for prescription drug coverage versus other plan benefits should be prepared to get an actuarial certification of whether the plan provides Minimum Value.

DOL Model Exchange Notices Not Panacea

Employers may want to use some or all of the language that the DOL included in Model Notices that DOL published in conjunction with its publication of interim guidance on FLSA Section 18B in Technical Release No. 2013-02 on May 8, 2013 here. Because employers must tailor the content of the Exchange Notice for their group health plan based on specific information about their group health plan, employers are cautioned not to underestimate the time or effort that will be required to properly prepare the Exchange Notice for their group health plan, whether or not the employer makes use of the Model Notices in whole or part.

DOL published three model exchange notices (Model Notices) to assist employers in preparing the Exchange Notice for their Health Plan for 2014. One Model Notice is intended for employers who do not offer a Health Plan.  The second Model Notice is designed for employers who offer a health plan to some or all employees. The third Model Notice is designed for employers to use to notify individuals who are enrolled or eligible to enroll in continuation coverage  under the Health Plan under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA).   Technical Release No. 2013-02 says employers may use the applicable of these models or a modified version, provided the Exchange Notice meets the content requirements described above.

Despite the availability of these Model Notices, preparing and providing the required Exchange Notices required by Section 18B typically requires significant evaluation and presents a variety of challenges for most employers.  While intended to facilitate the ability of employers to prepare and provide the required Exchange Notices, preparing the Model Notices generally is challenging for many employers.

First, even using the Model Notices, the employer must decide if the Health Plan provides Minimum Value.

Another challenge with wholesale use of the Model Notices involves deciding how much of the optional language contained in the Model Notices to include in the Exchange Notice and what optional information, if any, to provide as part of that Notice.

For one thing, the Model Notices propose that the Exchange Notice include statements that many critics view as inappropriately promoting enrollment in coverage through the Marketplace rather than employer sponsored group health plans.  Critics complain, for instance that the Model Notice’s statement that the Marketplaces offer “one-stop shopping” that allows the employee to get coverage that the Model Notice states is more “affordable” are inaccurate or misleading. Many critics view the assertion that coverage obtained through the exchange is more “affordable” to be inaccurate as it does not take into account a comparison of the actual benefits and costs of the respective plan options and whether the employee can afford the typically richer (and therefore often more expensive) benefit packages ACA’s essential health benefits mandates require be included in coverage offered for sale through the Marketplaces and presumes that these higher costs will be defrayed by tax credits or subsidies that are only available if the employee earns less than 400% of the federal poverty level and is not offered the option to enroll in an employer sponsored group health plan coverage that provides “minimum essential coverage” (MEC) and Minimum Value and is “affordable” within the meaning of ACA.

Employers considering using the Model Notices also need to decide if their Exchange Notices will include the optional factual disclosures about their group health plan suggested in the Model Notices, but not required to fulfill the requirements of FLSA Section 18B.

The Model Notices propose that an employer also voluntarily provide a significant amount of other information about its group health plan that FLSA Section permits, but does not require that the Exchange Notice include.  The DOL says it designed the Model Notices to help employers to identify and disclose information that the DOL expects employees interested in the tax credit to subsidize the employee’s cost of enrolling in coverage through the Marketplace will need to get from employers to show eligibility.  DOL assumes that many employers might want to voluntarily provide this information in the Exchange Notice to avoid receiving a multitude of anticipated inquiries from employees interested seeking tax credits to subsidize their enrollment in coverage through the Marketplace.  Since collection the data necessary to make these optional disclosures can add significant complexity and time to the preparation of the Exchange Notice, employers should carefully weigh the pros and cons of making the optional disclosures.  The anticipated demand for this information has declined since the Obama Administration announced it plans to use an “honor system” approach to determine if individuals can claim eligibility for tax credit subsidies for buying coverage through the Marketplaces in 2014.  Meanwhile, the interim nature of the existing guidance on the Exchange Notice and other key aspects of ACA make it reasonable to expect further changes in the expected content of the Exchange Notice, ACA requirements that it is intended to communicate or both which could impact the need for or accuracy of these disclosures.  For this reason, employers should carefully consider whether and what optional disclosures to include in their Exchange Notices.

Don’t Forget To Notify COBRA Qualified Beneficiaries

Technical Release No. 2013-02 indicates that in addition to sending an Exchange Notice to employees, employers or their group health plan administrators also must notify COBRA eligible or enrolled individuals.

In general, under COBRA, an individual who was covered by a group health plan on the day before a qualifying event occurred may be able to elect COBRA continuation coverage upon a qualifying event (such as termination of employment or reduction in hours that causes loss of coverage under the plan). Individuals with such a right are called qualified beneficiaries. A group health plan must provide qualified beneficiaries with an election notice, which describes their rights to continuation coverage and how to make an election. The election notice must be provided to the qualified beneficiaries within 14 days after the plan administrator receives the notice of a qualifying event.

Technical Release No. 2013-02 says that the DOL considers the required disclosures for the Exchange Notice information to be disclosed to qualified beneficiaries and that the DOL is revising previously published model COBRA notices to incorporate this information.

DOL says in Technical Release No. 2013-02 that the group health plans can use the revised model COBRA election notice to satisfy the requirement to provide the election notice under COBRA including the disclosure of information required by FLSA Section 18B. The DOL cautions that as with the earlier model COBRA notices, in order to use this model election notice properly, the plan administrator must complete it by filling in the blanks with the appropriate plan information. Technical Release 2013-02 states that use of the model election notice, appropriately completed, will be considered by the Department of Labor to be good faith compliance with the election notice content requirements of COBRA.

ACA SBC Mandate Overview

In addition to the Exchange Notice requirement, the need to prepare and timely delivery the “Summary of Benefits and Coverage or “SBC”) required by ACA also pressures employers to finalize their health plan terms and contracts for 2014 as soon as possible.

ACA amended the Public Health Services Act (PHS) Section 2715, Employee Retirement Income Security Act (ERISA) Section 715 and the Internal Revenue Code (Code) Section 9815 to require that Health Plans and health insurance issuers provide a SBC and a “Uniform Glossary” that “accurately describes the benefits and coverage under the applicable plan or coverage” in a way that meets the format, content and other detailed SBC standards set for ACA as implemented by the Departments regulatory guidance. Like the Exchange Notice, proper preparation of the SBC requires determination of whether the Health Plan provides Minimum Value, as well as other detailed analysis of the plan terms and coverages to complete the other disclosures required in the SBC.

The Summary of Benefits and Coverage and Uniform Glossary Final Regulation  (Final Regulation) implementing this requirement published February 14, 2012 generally requires Health Plans at specified times including before the first offer of coverage under the Plan as well as following certain material changes to the Plan. For Health Plans providing group health plan coverage, FAQs About ACA Implementation (Part VII)[*] set the deadline for Health Plan to deliver a SBC as follows, while at the same time indicating that the Departments would not impose penalties on plans and issuers “working diligently and in good faith” to provide the required SBC content in an appearance consistent with the Final Regulations:

  • To covered persons enrolling or re-enrolling in an open enrollment period (including late enrollees and re-enrollees) as the first day of the first open enrollment period that begins on or after September 23, 2012; and
  • For individuals enrolling in coverage other than through an open enrollment period (including individuals who are newly eligible for coverage and special enrollees) as the first day of the first plan year that begins on or after September 23, 2012. See FAQs About ACA Implementation (Part VIII).

While the SBC doesn’t prohibit an employer from amending its Health Plan terms after the enrollment period begins, employers that change Health Plan terms or designs after distributing a SBC must incur the expense and effort to prepare and redistribute an updated SBC.  Accordingly, most Health Plans and their sponsors or insurers will want to finalize Health Plan terms before the enrollment period begins to avoid the need to and expense of sending updated SBCs as a result of a later change in Health Plan terms.

The Final Regulation and other existing guidance generally dictates that Health Plans follow a required template for providing the SBC and accompanying glossary. When publishing the Final Regulation, the Departments also published the required SBC template form (2013 SBC Template) and instructions for Health Plans to use to prepare and provide the required SBC for coverage beginning before January 1, 2014 and promised updated guidance and templates for use in providing SBCs for post-2013 coverage. While the Agencies clarified certain other details about the SBC rules, they did not materially change the required content or form of the 2013 SBC Template until their April 23, 2013 release of FAQs About ACA Implementation (Part XIV). See e.g. FAQs About ACA Implementation Part IX and Part X.

FAQ Part XIV Requires MEC and Minimum Value Disclosures In SBC

FAQs About ACA Implementation (Part XIV) published April 23, 2013 announces the updated required 2014 SBC Template that the Agencies are requiring to SBCs for periods of health coverage from January 1, 2014 to December 31, 2014.  Along with the 2014 SBC Template, the Agencies also published 2014 Sample Completed SBC, which provides an example of a SBC completed for a hypothetical health plan prepared by the Agencies.

The 2014 SBC Template updates the 2013 SBC Template and Sample Completed Template to add information the Agencies believe individuals eligible for Health Plan coverage should know in light of the impending implementation of the individual shared responsibility requirements of Internal Revenue Code (Code) Section 5000A and the employer shared responsibility rules of Code Section 4980H commonly called ACA’s “pay-or-play” rules.   These were the “penalty” provisions that the Supreme Court ruled are taxes in 2013.

The April 23, 2013 FAQ expressly requires that SBCs for periods of coverage after December 31, 2013 disclose if the Health Plans provide MEC and Minimum Value to enable participants and beneficiaries to understand if enrollment in the Health Plan will suffice to allow the employee to avoid paying the individual penalty under Code Section 5000(a)’s individual “shared responsibility” rules, to compare the coverage and costs to enroll in the employer’s Health Plan versus to enroll in health care coverage through a Marketplace and to predict how their eligibility for enrollment in the employer’s Health Plan will impact their eligibility to qualify to claim tax credits under Code Section 32G to help subsidize the cost to purchase coverage through a Marketplace.

Code Section 5000A generally imposes a penalty tax on individuals that fail to maintain enrollment in MEC within the meaning of Code Section 5000A(f) and not otherwise exempt under Code Section 5000A(d).  As of the publication of this update, the Obama Administration has not announced any delay in the enforcement of this penalty against individuals, but legislation is pending in Congress that would delay its applicability, along with approving the delay of enforcement of the Code Section 4980H penalties previously announced by the Obama Administration.

Although the Obama Administration announced in early July, 2013 that it will not enforce collection of the Code Section 4980H provisions against employers until 2015, Code Section 4980H generally requires employers of 50 or more full-time employees to pay a penalty if the employer fails to offer a group health plan providing MEC and Minimum Value   Minimum Value is determined for this purpose in the same manner that it is determined for purposes of making the required disclosure in the Exchange Notice.

60-Day Advance Notice of Material Changes Requirement

In addition to providing the required Exchange Notice and SBCs, employers, group health plans and their plan administrators also must ensure that participants and beneficiaries are given at least 60 days prior notice before the effective date of any “material reduction in covered services or benefits.” See 29

CFR Section 2520.104b-3(d)(3); also see 29 CFR Section 2520.104b-3(d)(2) regarding a 90-day alternative rule.

Section 102 of ERISA has been amended to require 60-day advance notice of material plan changes for plan years beginning on or after September 23, 2012 before the change can be effective.  The 60-day advance notification requirement is a modification to the summary plan description/summary of material modification requirements generally applicable to employee benefit plans under ERISA.

The rule’s definition of “material modification” is the same as the definition in the summary of material modifications rule generally applicable to employee benefit plans under ERISA Section 102.

DOL guidance indicates that group health plans can meet the 60-day advance notice requirement by providing an updated Summary of Benefits and Coverage if the change is reflected on the summary or by sending a separate written notice describing the material modification.

Group health plan issuers or sponsors that willfully (intentionally) fail to provide the notice of material modification can face a fine of up to $1,000 for each failure. Each covered individual equates to a separate offense for purposes of these penalties.

Employer and other group health sponsors, issuers, fiduciaries and administrators also should keep in mind that courts historically refuse to enforce reductions in benefits or services provided under the plan until participants and beneficiaries are notified of the change.  For purposes of the ERISA notification rules, group health plans, their sponsors, insurers, administrators and fiduciaries are cautioned to take into account whether health care providers or other parties who have assignments of benefits should be provided with notification under these or other ERISA rules in addition to the employees and dependents who are enrolled in coverage under the group health plan.

Notice Deadlines Mean Time Short To Adopt & Communicate 2014 Plan Terms

Employer and other health plan sponsors, insurers, administrators and others involved in 2014 group health plan decisions and preparations must take into account these notification deadlines and allow adequate lead time to properly finalize, adopt and communicate their 2014 health plan terms.

Since group health plan design decisions must be finalized to properly prepare the Minimum Value disclosures required in the Exchange Notice and the SBC and any material reductions required by the 60-day advance notice requirement, time running short to finalize 2014 plan designs.

Employer and other plan sponsors, fiduciaries, administrators, and insurers are cautioned that their preparations should ensure both the necessary disclosures are made and that all disclosures are carefully prepared so that the notifications and the plan terms are consistent.

These preparations should include the critical review and coordination of the language of health plan documents and summary plan descriptions in light of these other notifications to identify and address potential differences between the government-mandated terms and language in the Glossary and SBC, the Exchange Notice and 60-day notice and the plan terms and summary plan description.

Arrangements also must include proper structuring and formatting of all of these documents and timely distribution in accordance with applicable regulations to participants and beneficiaries entitled to receive these documents in a manner that positions the employer, the group health plan and its fiduciaries and insurers to show compliance. In regard to distributions, parties planning to distribute notifications electronically need to ensure that any electronic or other methods of distribution meet applicable requirements and that the Health Plans timely send copies to all entitled parties – employees and dependents – in accordance with the applicable rules.

When planning these activities, group health plans, their sponsors, insurers and administrators also generally will want to minimize distribution costs by coordinating distribution of these ACA mandated notices with other notifications required for group health plans about privacy, coverage for newborns and mothers, mental health coverage, post-mastectomy reconstructive surgery and the like.

For Help or More Information

If you need help understanding or dealing with these impending notification requirements, with other 2014 health plan decision-making or preparation, or with reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials concerning regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, HR.com, Insurance Thought Leadership, Solutions Law Press, Inc. and other publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

For important information about this communication see here. THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2013 Cynthia Marcotte Stamer, P.C. 

Nonexclusive license to republish granted to Solutions Law Press, Inc.  All other rights reserved.


[*] On January 24, 2013, the Department of Labor (the Department) issued guidance stating the Department’s conclusion that the notice requirement under FLSA section 18B will not take effect on March 1, 2013 for several reasons until further guidance setting the extended deadline was published.


Health Plan Pays $1.2M+ HIPAA Settlement For Not Protecting PHI On Copiers

August 15, 2013

Affinity Health Plan, Inc. (Affinity) will pay $1,215,780 and take other corrective actions to settle alleged violations of the Health Insurance Portability and Accountability Act (HIPAA) Privacy and Security Rules under the Affinity Resolution Agreement and CAP (Affinity Settlement) with the U.S. Department of Health and Human Services (HHS) Office of Civil Rights (OCR).  The settlement comes as the September 24, 2013 deadline for health plans, health care providers, health care clearinghouses (Covered Entities) and their business associates to update the written business associate agreements that HIPAA requires exist before business associates can be allowed to create, use, access or disclose personally identifiable health care information protected by HIPAA (PHI) to carry out HIPAA-covered functions on behalf of a Covered Entity to comply with changes to HIPAA’s implementing regulations adopted by OCR earlier this year.  Health plans and other Covered Entities should take timely action to confirm that their existing procedures appropriate safeguards to protect PHI when using or disposing of copiers or other equipment or media as well as to implement business associate or other policy, procedures or training updates required to comply with the updated HIPAA rules.

HIPAA Updates Require Breach Notification, Tightened Other HIPAA Requirements

HIPAA generally requires that Covered Entities (and after September 24, 2013, their business associates) safeguard and restrict the use, access or disclosure of PHI as required by HIPAA.  The HITECH Act amended these requirements to tighten certain of these requirements and restrictions, to expand the sanctions for violation of these requirements, to require Covered Entities and their business associates to provide notification of breaches of unsecured PHI to individuals whose information was breached, OCR and in some cases, the media, and made certain other changes to the original requirements of HIPAA.  Earlier this year, OCR amended and restated its original Privacy and Security Rules here (2013 Final Rule) to comply with changes in the regulations resulting from these HITECH Act amendments beginning last March, but set the deadline for updating business associate agreements to meet these updated requirements at September 23, 2013.

The 2013 Final Rule and other OCR guidance makes clear that OCR expects Covered Entities and their business associates appropriately to safeguard PHI stored in computers, hard drives, and other digital media until it is properly disposed in accordance with the updated standards required by HIPAA as implemented under the 2013 Final Rule. HITECH Breach Notification Rule requires HIPAA-covered entities to tell HHS of a breach of unsecured protected health information, including breaches resulting from failure to properly secure PHI stored in digital format until it has been destroyed in accordance with the standards established by the 2013 Final Rule.   OCR previously has sanctioned other Covered Entities for failed to properly destroy or safeguard PHI stored in digital format on computer or other equipment before abandoning or disposing of that equipment.  The Affinity Settlement reaffirms OCR’s concern that Covered Entities meet these disposal requirements when replacing or abandoning equipment containing electronic PHI.

Affinity Settlement Highlights

According to the August 14, 2013 OCR announcement of the settlement, the settlement resulted from an investigation initiated after Affinity filed a breach report with OCR on April 15, 2010, as required by the Health Information Technology for Economic and Clinical Health Act (HITECH Act.)

In its breach report, Affinity indicated that a representative of CBS Evening News told Affinity that, as part of an investigatory report, CBS had purchased a photocopier previously leased by Affinity.  CBS informed Affinity that the copier that Affinity had used contained confidential medical information on the hard drive.

Affinity estimated in its breach report that up to 344,579 individuals may have been affected by this breach. OCR’s investigation indicated that Affinity impermissibly disclosed the protected health information of these affected individuals when it returned multiple photocopiers to leasing agents without erasing the data contained on the copier hard drives.  In addition, OCR reports its investigation revealed that Affinity failed to incorporate the electronic protected health information (ePHI) stored on photocopier hard drives in its analysis of risks and vulnerabilities as required by the Security Rule, and failed to implement policies and procedures when returning the photocopiers to its leasing agents.

In addition to the $1,215,780 payment, the Affinity Settlement includes a corrective action plan requiring Affinity to use its best efforts to retrieve all hard drives that were contained on photocopiers previously leased by the plan that remain in the possession of the leasing agent, and to take certain measures to safeguard all ePHI.

Learn From Affinity Lesson On Proper Disposal Procedures

Like prior OCR settlements stemming from inadequate security for PHI when transitioning equipment, media or facilities, the Affinity Settlement sends another reminder to Covered Entities and their business associates again of the importance of using appropriate procedures to protect or dispose of PHI when replacing or redeploying equipment or media that may contain PHI.

“This settlement illustrates an important reminder about equipment designed to retain electronic information: Make sure that all personal information is wiped from hardware before it’s recycled, thrown away or sent back to a leasing agent,” said OCR Director Leon Rodriguez.  “HIPAA covered entities are required to undertake a careful risk analysis to understand the threats and vulnerabilities to individuals’ data, and have appropriate safeguards in place to protect this information.”

OCR has published guidance concerning HIPAA’s requirements for the proper safeguarding and disposal of media and equipment in the 2013 Final Rule and other guidance.  Concerning the proper disposition of copiers that may have PHI stored on their hard drives or in other digital formal, OCR in the Affinity Settlement recommended that Covered Entities and their associates also review the Federal Trade Commission’s Guidance On Safeguarding Sensitive Data Stored In The Hard Drives Of Digital Copiers and the National Institute of Standards and Technology has issued Guidance On Assessing The Security Of Multipurpose Office Machines.  Covered Entities and their business associates should use this and other guidance to ensure that they can demonstrate that appropriate practices and procedures have been used to when disposing of or repurposing copies or other equipment that may contain electronic PHI.

HIPAA Regulation Updates Require Other Updates Beyond Disposal Procedures

In addition to addressing the concerns that lead to the Affinity Settlement, Covered Entities and their business associates also should verify that their practices, policies, privacy notices, business associate agreements, and training also are updated to comply with updates to the updated 2013 Final Rule adopted by OCR earlier this year here.

Since passage of the HITECH Act, OCR officials have warned Covered Entities to expect an omnibus restatement of its original regulations.  While OCR had issued certain regulations implementing some of the HITECH Act changes, it waited to publish certain regulations necessary to implement other HITECH Act changes until it could complete a more comprehensive restatement of its previously published HIPAA regulations to reflect both the HITECH Act amendments and other refinements to  its HIPAA Rules. The 2013 Regulations published today fulfill  that promise by restating OCR’s HIPAA Regulations to reflect the HITECH Act Amendments and other changes and clarifications to OCR’s interpretation and enforcement of HIPAA.

In response to the updated Final Regulations and these expanding HIPAA enforcement and exposures, all Covered Entities should review critically and carefully the adequacy of their current HIPAA Privacy and Security compliance policies, monitoring, training, breach notification and other practices taking into consideration OCR’s investigation and enforcement actions, emerging litigation and other enforcement data; their own and reports of other security and privacy breaches and near misses; and other developments to decide if additional steps are necessary or advisable.   In response to these expanding exposures, all covered entities and their business associates should review critically and carefully the adequacy of their current HIPAA Privacy and Security compliance policies, monitoring, training, breach notification and other practices taking into consideration OCR’s investigation and enforcement actions, emerging litigation and other enforcement data; their own and reports of other security and privacy breaches and near misses, and other developments to decide if tightening their policies, practices, documentation or training is necessary or advisable.

For Help or More Information

If you need help monitoring or providing input on this legislation or to understand and respond to these or other legislation, laws and regulations, or with reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters including extensive experience on HIPAA and other privacy and data security issues.  Author of numerous prominent publications on HIPAA and other data security and privacy concerns impacting health plans, health care providers, employers, financial services providers and others, Ms. Stamer also serves as the scribe for the ABA JCEB annual Technical Sessions meeting with OCR and has represented numerous health plans, employers, health care providers and others in investigating, redressing, reporting data breach, identity theft and other compliance concerns.

She advises clients on, publishes, and speaks on HIPAA and other health plan, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials about regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

For important information about this communication click here. THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2013 Cynthia Marcotte Stamer, P.C.  Nonexclusive license to republish granted to Solutions Law Press, Inc.  All other rights reserved


Legislation Proposes To Change Obama Care Full-Time Employee Definition

August 5, 2013

Businesses and workers concerned that the definition of “full-time” employment as 30 hours per week in the “pay-or-play” penalties of the Patient Protection and Affordable Care Act (commonly referred to by the public  as “Obamacare”) is hurting American workers may want to share their input on recently introduced legislation that would raise the number of hours an employee must work to qualify as “full-time”  for purposes of the pay-or-pay penalty from 30 to 40 hours per week with members of the key Congressional Committees that will decide whether this legislation advances when Congress returns from its Summer vacation.

Growing concern about the costs and other implications of Obamacare are fueling renewed debate in Congress about the pay-or-play and other provisions of Obamacare.  Only 57 days before enrollment in coverage slated to be available as an alternative to employer coverage beginning January 1, 2014 through new federally mandated health insurance exchanges is prompting renewed debate in Congress about the full-time employee, pay-or play and other provisions of Obamacare.  As Congress takes its summer break, both sides are talking and listening to voters about health care reform. Concerned parties should share their input on Congress during this break to help shape the decisions Congress makes when it returns to work in September.

“Full-Time Employee” Definition Key Element Of  Employer’s “Pay-Or Play” Liability

Originally scheduled to take effect on January 1, 2014 until the Administration on July 2, 2013 announced it would not enforce its provisions until 2015, the employer “shared responsibility” or “pay-or-play” rules of Internal Revenue Code (Code) Section 4980H enacted as part of Obamacare have been widely criticized as killing jobs and reducing employment.

When effective, Code Section 4980H will require that businesses employing 50 or more “full-time” employees (Large Employers”) pay a tax penalty calculated in accordance with Code Section 4980H unless the Large Employer offers each “full-time employee” the opportunity to enroll himself and each of his dependent children in coverage under a qualifying health plan that meets the minimum essential coverage, minimum value and affordability standards of Obamacare.

Under the current provisions of Code Section 4980H, the amount of the penalty that a Large Employer must pay is:

  • $168 per employee per month for any month that the employer doesn’t offer minimum essential coverage to each full-time employee and has at least one full-time employee who receives a subsidy or tax credit for enrolling in coverage under one of the health insurance exchanges created by Obamacare (Subsidized Employee);
  • $250 per employee month multiplied by the number of full-time employees of the business that are Subsidized Employees if the employer offers coverage under the health plan that provides minimum essential coverage but the health plan fails to meet the minimum value or affordability standards of Code Section 4980H; or
  • $0 if the employer either offers health plan coverage that meets the minimum essential coverage, minimum value and affordability requirements of Code Section 4980H or doesn’t have any full-time employees who are Subsidized Employees.

30-Hour Full-Time Definition Reducing Full-Time Employment Opportunities

As the original January 1, 2014 implementation date of Code Section 4980H has approached, original largely Republican concern about its unintended adverse impact on employment increasingly has grown amid widespread reports that businesses are avoiding hiring and reducing employee hours to minimize exposures to Code Section 4980H-driven costs. See, e.g. Obamacare’s Employer Penalty And Its Impact On Temporary Workers;  States Cutting Employee Hours To Avoid Obama Care Costs; Americans Who Voted For Obama Now Seeing Weekly Job Hours Slashed Below 30 As Obamacare Kicks In.  Particularly embarrassing among these reports include the recent report that even a call center hired by the Administration to help promote enrollment coverage offered through the Obamacare-created  exchanges is limiting the hours its employees can work to under 30 hours per week.  ObamaCare Call Center To Keep Employees Under 30 Hours/Week.

As businesses already struggling to deal with a tough economy moved to minimize the number of their full-time employees, even labor unions that originally supported Obamacare joined the cry for reform of its provisions to mitigate employment losses resulting from employer efforts to minimize Code Section 4980H exposures.  See Companies Cut Hours Of Full-Time Employees To Avoid Providing Health Care Under New Rules.

S. 1188/H.R. 2575 Would Make Full-Time Mean 40 Hours Per Week

Prompted by growing concern about the apparent adverse impact of Obamacare on job opportunities for hourly workers, legislation now is pending in both the House and Senate to amend the Obamacare’s definition of “full-time.” In June, Senators Susan Collins (R-ME) and Joe Donnelly (D-IN) Collins introduced a bill to amend  Code Section 4980H to change the definition of full-time employee for purpose of the shared responsibility provisions of Obamacare,  S. 1188: Forty Hours Is Full Time Act to change the definition of “full-time” from 30 to 40 hours per week and the number of hours counted toward a “full-time equivalent” employee to 174 hours per month.  Representative Todd Young (R-IN) then introduced a similar provision in the House on June 28, 2013, H.R. 2575, Save American Workers Act of 2013

H.R. 2575 has garnered the support of 144 Cosponsors.  H.R. 2575.  Following its introduction, the House assigned H.R. 2575 to the House Ways and Means Committee, whose members now must decide when and if the bill will advance in the House.  Key members of the House Ways and Means Committee who will make this decision on include the following Committee Members:  Dave Camp; Sander Levin; Charles Boustany Jr.; Kevin Brady (Chair, Subcommittee on Health); Sam Johnson; Devin Nunes; David Reichert (Chair, Subcommittee on Human Resources);  Patrick “Pat” Tiberi; Xavier Becerra; Diane Black Earl Blumenauer; Vern Buchanan; Joseph Crowley; Danny Davis; Lloyd Doggett;  Jim Gerlach; Tim Griffin; Lynn Jenkins; Mike Kelly; Ron Kind; John Larson; John Lewis; Kenny Marchant; Jim McDermott; Richard Neal; Bill Pascrell Jr.;  Erik Paulsen; Tom Price; Charles Rangel; Tom Reed II, James Renacci; Peter Roskam; Paul Ryan; Aaron Schock; Allyson Schwartz; Adrian Smith; Linda Sánchez; Mike Thompson; and the Bill’s sponsor, Todd Young.

Although introduced before H.R. 2575, S. 1188 to date has drawn less interest among members of the Senate.  The Senate referred S. 1188 to the Senate Finance Committee, where to date, that Committee has not taken any further action. It presently has 8 cosponsors, 7 of which are Republicans.  See S. 1181 Cosponsors.  With Democrats the Majority Party in the Senate, many expect the bill to require significant public pressure and support for the Committee to report the bill out from the Committee, which presently is Chaired by Democrat Max Baucus.  Other Senate Finance Committee members include Orrin Hatch; Michael Bennet; Sherrod Brown; Robert “Bob” Casey Jr.; John “Jay” Rockefeller IV; Debbie Stabenow; Ron Wyden; Richard Burr; Maria Cantwell; Benjamin Cardin; John Cornyn; Michael Crapo;  Michael Enzi; Charles “Chuck” Grassley;  John “Johnny” Isakson; Robert “Bob” Menéndez; Bill Nelson; Robert “Rob” Portman; Pat Roberts; Charles Schumer; John Thune; and Patrick “Pat” Toomey.

This past weekend, S. 1188’s sponsor, Maine Senator Susan Collins sought to beef up support for the bill.  In urging support for her bill, Senator Collins said the health care law’s 30-hour per week definition kills jobs. “Obamacare is actually discouraging small businesses from creating jobs and hiring new employees,” she said. “The law also has perverse incentives for employers to reduce the number of hours that their employees can work.”

How To Contact Key Committees To Show Support or Share Other Feedback

Individuals wishing to share their support or other input about S. 1181 with the Senate Finance Committee can call (202) 224-4515 or  send their written input to the Senate Committee on Finance members via fax to (202) 228-0554.

Support or other input on H.R. 2575 should be sent via fax to House Ways & Means Committee members via fax to (202) 225-2610 or by calling the Committee office at (202) 225-3625.

Committee members and other members of Congress also generally can be contacted via e-mail through the link provided on each member’s webpage.  Because security precautions generally delay delivery of mail to members of Congress for 7-10 days, concerned individuals generally are encouraged to contact the Committee or other members of Congress via fax or e-mail.

Stay In Touch & Join The Discussion On Health Care Reform

Want to stay in touch with the latest developments on health care reform and get involved with helping to share  meaningful improvements in U.S. health care and workforce policy and our health care and health care insurance system?   The Coalition For Responsible Health Care Policy provides a resource that concerned Americans can use to share, monitor and discuss the Health Care Reform law and other health care, insurance and related laws, regulations, policies and practices and options for promoting access to quality, affordable healthcare through the design, administration and enforcement of these regulations.  We also encourage you to participate in our Project COPE: Coalition for Patient Empowerment initiative here to share ideas, discuss issues, and access and share tools and other resources.

For Help or More Information

If you need help monitoring or providing input on this legislation or to understand and respond to these or other legislation, laws and regulations, or with reviewing and updating, administering or defending your group health or other employee benefit, human resources, insurance, health care matters or related documents or practices, please contact the author of this update, Cynthia Marcotte Stamer.

A Fellow in the American College of Employee Benefit Council, immediate past Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Group and current Co-Chair of its Welfare Benefit Committee, Vice-Chair of the ABA TIPS Employee Benefits Committee, a council member of the ABA Joint Committee on Employee Benefits, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer is recognized, internationally, nationally and locally for her more than 25 years of work, advocacy, education and publications on cutting edge health and managed care, employee benefit, human resources and related workforce, insurance and financial services, and health care matters including extensive experience on HIPAA and other privacy and data security issues.

A board certified labor and employment attorney widely known for her extensive and creative knowledge and experienced with these and other employment, employee benefit and compensation matters, Ms. Stamer continuously advises and assists employers, employee benefit plans, their sponsoring employers, fiduciaries, insurers, administrators, service providers, insurers and others to monitor and respond to evolving legal and operational requirements and to design, administer, document and defend medical and other welfare benefit, qualified and non-qualified deferred compensation and retirement, severance and other employee benefit, compensation, and human resources, management and other programs and practices tailored to the client’s human resources, employee benefits or other management goals.  A primary drafter of the Bolivian Social Security pension privatization law, Ms. Stamer also works extensively with management, service provider and other clients to monitor legislative and regulatory developments and to deal with Congressional and state legislators, regulators, and enforcement officials about regulatory, investigatory or enforcement concerns.

Recognized in Who’s Who In American Professionals and both an American Bar Association (ABA) and a State Bar of Texas Fellow, Ms. Stamer serves on the Editorial Advisory Board of Employee Benefits News, the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, and active in a multitude of other employee benefits, human resources and other professional and civic organizations.   She also is a widely published author and highly regarded speaker on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, Modern and many other national and local publications.   You can learn more about Ms. Stamer and her experience, review some of her other training, speaking, publications and other resources, and register to receive future updates about developments on these and other concerns from Ms. Stamer here.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

For important information about this communication click here. THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

 

©2013 Cynthia Marcotte Stamer, P.C.  Nonexclusive license to republish granted to Solutions Law Press, Inc.  All other rights reserved